Groups vary widely. From fast pacelines riding inches apart, to loose gaggles with lots of weaving and chattering.

If I see a group using the standard group riding signals, I'm usually willing to think they know what they are doing and should be a reasonably safe group to ride with.

On the topic of group riding signals - this is what I see in use, anyone want to add others?
- Point to hazards, hand down and finger indicating the object, to alert following rider to storm drain, pothole, debris, soft shoulder, etc
- Make the "going around" motion (sweeping hand from right to left behind your back), to alert to shifting left and making a pass, e.g. of a slower rider or a pedestrian
- Signal slowing or stops, with open hand, pointing down, palm toward the following rider
- Signal turns, the usual way
- Call "clear" when crossing a street
- Call "car back" to alert riders in front to an overtaking car
- Call "bump" to alert following rider of a sharp bump or drop, you don't hand-signal these since your own hands are needed on the bars
- I recently saw a sgnal for gravel, which was waggling the hand with fingers outstretched and separated, that was a new one to me
- Call "on left" or "passing left" as needed

And on the topic of group riding behaviors - again, please add what I'm leaving out
- No sudden braking (unless, of course, you have to . . . )
- Ride a steady speed; if you start to ease up, give a visual cue (e.g. sit up)
- Maintain the group's speed when you are leading
- No sudden swerves (unless you have to)
- No overlapping the rear wheel of the rider in front -
- Ride single file where needed
- Tell the rider in front if you are wheelsucking him - not so much a courtesy as for your own safety
- In curves, anticipate that other riders may move from the outside of the lane to the inside at the apex of the curve, and then out again, and they may be too focused on making the turn to notice you
- Also in curves, remember the rider in front may brake more for the curve than you would

So, for the OP, the leading rider of that group should normally have called out "passing on your left" or something similar, while making the "going around" signal to the following rider.