Quote - I know that I have been successful saving grouped props as a smart prop before

No you haven't.

willyb53 is correct. When you use Select Subset, you don't get the option to save as a smart prop. Here is a way to work round it.

METHOD #1.
First make sure 'Use file compression' is turned off in the 'Misc' tab of your 'General Preferences'. With the props parented as desired, 'Memorize' all the props (keys), then save all the props to a single pp2 file by using 'SelectSubset'.

Open the resulting pp2 file in a plain text editor (NotePad should do at a pinch). Use the editors 'Search & Replace'  function ('Find & Replace', or just 'Replace' in some editors). Set the search string to be "parent UNIVERSE". Set the replace string to be "smartparent rHand", and do 'Replace All'. Save the file.

I used "smartparent rHand" in this example, but of course you can use any body part that you like as the parent, eg "smartparent lHand", or "smartparent head". You must use the internal name of the body part, not its display name. In recent versions of Poser, you can find the internal name of any actor by selecting that actor and looking in its 'Properties'.