Actually I think I already know the answer to this one but ill leave it up anyways.
Its because group is a DisplayObject and when a child is added the rollover will just do a Rectangle.containsPoint(mouseX, mouseY) and hence return true.
So in other words if you have a group at 0,0 and a child element at 100,100 with width 10 and height 10 the group is going to have a hitbox area == 0,0,110,110 even though only a small part of it would return true in an alpha hittest.
Group.mouseEnabledWhereTransparent might be helpful to you:
<s:Group mouseEnabledWhereTransparent="false" rollOver="trace('ya')">
<s:Rect x="100" y="100" width="20" height="20">
<s:SolidColor color="0x00ff00" />
Ahaaaah!!! Excellent thankyou for that! Again, Flex delivers with a hidden property