A group counted as a Live Paint group when its name started with "Live
Paint". A plain group named, for example, "Live Painting" was then read
as one. With it and another shape selected, the Shape Builder found no
regions in it, and a merge on the other shape deleted the group and its
paths. Make Live Paint took the group as a Live Paint group to merge
into, and its paths did not become sources.
A Live Paint group now also needs its sources group, the group named
"Live Paint Sources" that Make Live Paint puts in it. A plain group with
such a name is traversed like any other group.