Yes, the old modgroups file will work just fine and you will get the ModGroups prompt again if there is at least one ModGroup which applies.
Having said that, the .modgroups files is horribly horrible out of date and would really need to be properly updated. But I have neither the time, nor the information required, to do that.
That is what i thought, But, then I thought about the issue of being outdated has well.
changes have been made in the next OOO , MMM, FCOM in particular. That will pretty much make using modgroups a bad idea, since nearly every record has most likely been touched or changed and that information in modgroups would have to be update which would be task. All OOO and MMM npc creatures have been modified and inventory changed to use a new leveledlist system for many items they once carried in the next Release's.
I suspect that it could also be Highly out of date with Current MMM 3.7b3 and UFCOM and UOP 3.3.X and UOMP Supplemental Version fixes has well.
I never use modgroups of course, just noticed it was missing once again.
so perhaps it should be left out in future version since most of major mods that it would cover do get updates from time to time once again.