Strange behavior using Appearance on group

Hey,

Been using Illustrator for a million years.
Something recently changed in how fills and strokes affect elements inside a group.
In general, I expect a Fill effect on a group to apply to the whole group as a single object, rather than apply the fill individually to each part of the group.

To give an example:
These are 2 separate regular squares.

I would like to apply a gradient on top of the existing fill.
To receive this effect: (Which in this example I got by placing a compound object above the 2 squares, defeating the purpose of using the appearnce tab on a group).

So like always, I group the 2 squares and apply a fill effect on the group, which gives me this horrid result:

Why is the fill effect being applied separately to every element inside the group???
Why would it even change? am I being gaslit by Adobe?
SO MANY QUESTIONS.

Anyone know of a setting that fixes this behavior?
Using the latest Ai version and all that.

Thank you for reading.