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Menu type community>>All Groups doesn't work correctly when Search Engine Friendly URLs is on.
I have also noticed that Menu Item Type displays as "-Create Group" under Menu Manager: Edit Menu Item and the link points to index.php?option=com_community&view=groups when non SEF URL actually loads index.php?option=com_community&view=groups&Itemid=103
With SEF URL on, system loads /groups instead of /groups/display
please try check it. this is itemID issue. joomla classic issue. I re-created main menu item for jomsocial. itemID must higher than Jomsocial toolbar items ID.