Hi Benetta. This is a tricky concept, but from what I've observed, the report seems to load the data first by the Sort Order (e.g. Name, judging from the little arrow at the top of that column on your screenshot) for the first chunk of rows that match the criteria, and then with those results, applying the Grouping (on Planned Completion Date) second . To get the Groupings to apply more logically, I suggest you add the Planned Completion Date to the view (as the first column, logically), and sort by it first, ascending, and then by the project name second. That way, Workfront will bring back what you expect to group by first, and the group by it second, resulting in Groupings that are Ordered Logically.
Regards,
Doug