Server group &1 for parallelization is not valid

What causes this issue?

The configured server group is not valid and cannot be used for search
parallelization.

System Response

The parallelization cannot be performed.

How to fix this error?

Check the group in RZ12. It needs to have at least one application
server. The type of the group needs to be "Server Group" not "Logon
Group".
Enter this group in the Enterprise Search -> Federation customizing.

Procedure for System Administrators

The system issues an error message and will not allow you to continue with this transaction until the error is resolved.

Error message extract from SAP system. Copyright SAP SE.