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Hi Casey,
Thanks for your suggestion.
You can already achieve option 2 directly via the UI. When creating a new user, you have the ability to set them as a group-level user and select from the new group options, which include a checkbox to support location selection. You can find more details here: IBM Docs – Creating Users in a Single Form.
Alternatively, if you're adding groups to an existing user, you can leverage the same location checkbox when creating a new group from the Groups grid. Once created, the group can then be assigned to the relevant users.
Another option would be to go Manage, location, [find location name], contacts and logins, *add member*