What is the difference between Pathfinder in Effects in menu and the Pathfinder palette

> "But I couldn't understand why they need to be in group?"

In short, it's not necessarily a group. Pathfinder effects require a container. This can be a group, nested groups, a layer, a nested layer structure, multiple appearance attributes (which are special kinds of groups) and some other containers as well.

These are just the preconditions in order to do astonishing things with the Pathfinder effects.

If you apply them to single objects that are not part of a container, most of the time you may think that they do not work because they cannot interact as intimate with their comrades as it is possible as part of a container.

Pathfinder effects do work, but they need to be applied in specific ways. They are very useful when used in appropriate circumstances.

Most of the time you won't need the effects. On top of pathfinder functions there is the live paint and the shapebuilder.

What is it that you want to do?

I've written about it all:

http://illustratorbuch.de/pathfinder-and-other-construction.html

https://www.vektorgarten.de/pathfinder-function-and-effect.html

The difference is using the pathfinder palette changes your path shapes to the result (unless you hold alt when clicking)

The effects are supposed to be live effects you can turn on/off & edit. As you noticed the liveeffects for pathfinder as don't work, so I never use those. For all others I prefer the live effects, just not pathfinder.