The problem is not because it is the default project group, It's due to the fact project group contains a template definition. I obtain the same error by creating new project group and assign a template definition.
I got that Continuum can eliminate this type of projectgroup, but when they have problems with the generation of projects and Ant Console. Only need create a not null restriction about group project.
You believe that it would be working on this improvement, or just perform a single validation, so as not to allow the removal of the default project group?