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How can I apply a stroke with a gradient to a group in such a way that both extremes of the gradient are visible (without the group having to be the size of the canvas)? I'm guessing the "Align with Layer" checkbox is related to this, but I can't get it to work for groups.
Here's a quick video of me moving an effect from a layer to a group. I can't get the group-effect to work the same as the layer-effect. https://gfycat.com/smoothuntriedelephantbeetle
Using Windows 11 Pro, tried both Photoshop 2022 and 2023.
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If I can understand your question then the only way that comes to my mind is using layer mask applied to group and layer effects applied to group too. For layer mask use selection from transparency created using shape (Ctrl + click on shape to load selection). Is that what you want or I do not understand?
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As a workaround you can convert the Group to a Smart Object before applying the Gradient Overlay.