grouping is for determining material participation. if you do not aggregate and you materially participate in rental 1 but not rental 2 and spends over 750 hours performing services for properties 1 and 2. then property 1 is nonpassive but property 2 is. on the other hand, if you aggregate both would be nonpassive. the downside is aggregating means that since you have 1 activity any suspended passive losses would not be allowed until both properties are disposed. of. there are other rules.
here's a link to what material participation is
https://www.investopedia.com/terms/m/material-participation-test.asp
