To reproduce the error do the following steps,
1.Login as user1.
2.Create a folder 'x'.
3.Then automatically, user 'user1' and role 'UserRole' both get all read,write,delete,security permissions.
4.Now update security
click 'groups' tab and uncheck all the permissions for UserRole(start uncheking from security,delete,write,read).
5.Now close the 'security' window.
6.Again click on update window and try to give permissions to UserRole'. It is not showing 'UserRole' under 'groups' tab
We did this on your demo site and took screenshot after every action here is the link for screenshots
http://realution.in/htmlcss/permissionbug/
1.Login as user1.
2.Create a folder 'x'.
3.Then automatically, user 'user1' and role 'UserRole' both get all read,write,delete,security permissions.
4.Now update security
click 'groups' tab and uncheck all the permissions for UserRole(start uncheking from security,delete,write,read).
5.Now close the 'security' window.
6.Again click on update window and try to give permissions to UserRole'. It is not showing 'UserRole' under 'groups' tab
We did this on your demo site and took screenshot after every action here is the link for screenshots
http://realution.in/htmlcss/permissionbug/