It does not appear that Unknown group members are used in determining the group status.
If I have a group with two members, 1 is Up, 1 is Unknown and set the Group to Worst, it shows Up. I expect it to be Unknown since that is 'worse' than Up.
And similarly, if I set that group to Mixed, it shows Up. I expect it to be Warning (yellow).
Documentation states that the status of a group is determined by the status of the group members.
This can be set to Best, Worst or Mixed as described here:
http://www.solarwinds.com/documentation/en/flarehelp/orionplatform/content/core-managing-the-display-of-group-status-sw1691.htm
That link shows examples such as these but they don't include my situation:
