Grouping is very simple, you just specify how many pixels get grouped together "n" and the controller just sends the same data "n" times.
So if you had dmx data of:
0xFF, 0x0F, 0xF0
and a grouping of two, the pixel data would look like:
0xFF, 0xFF, 0x0F, 0x0F, 0xF0, 0xF0.
This is not exactly how it works for RGB, but should give the idea.
By using a pixel to extend the range to the string, you effectively giving up a pixel, but if the controller program is written correctly dummy data can just be sent to the first pixel as it will be stripped out of the stream and you will not loose 3 channels.
So you are using one hardware pixel, but should not effect you channel count output.