I'm in 2024. And I believe I have figured out the problem. I must, as you suggested, select the group once, then select the item but then here is the critical point of failure:
THEN I must move my mouse down to the keystroke entry area and, ONLY THEN... I can type the keystroke that I want associated with that item. The cursor must be in keystroke area. When I attempted to type the short-cut keystroke after selecting single item it only re-grouped the selection: a frustrating cycle.
I don't remember the process being so clumsy in previous versions, but there it is.