...try setting up a test user who is a member of no groups on one of your boards where this is working and see if that user gets notifications
Yes, that works. Everything works fine on the boards where it works. Email goes out where it should, and doesn't where is no longer should. (But I did a double check to test this.)
...try again on the board that has no groups. I can't see from the code why it would matter whether there are or are not groups, but I guess you never know...
On a test board with no mods and no groups, I set 2 users, no special rights for the test user (the other is Admin). I set them to watch a topic in a registered (not hidden) forum. On posting they both get notified.
Next I add the mod. Both users are Watching, both post, neither gets notified.
I create a group, give it mod rights to the forum (Admin is group mod), both post, both get notified. (The group has NO members, only the Admin as group mod. If the group doesn't have mod rights to anything, no notifies go out.)
I created a new registered (not hidden) forum, took away group mod rights to the first forum, then nothing works again. Next I added group mod rights to the new forum, but posted in the old first watched forum, both post, and both get notified.
In previous testing I tried adding members to a group that wasn't given rights to any forum and that didn't help... a group must be connected to some, any (but at least one) forum, but members DON'T have to be a part of the group (I reported this incorrectly before-saying they did have to be group members). My test user was never a part of the group on the test board, and the Admin was a group mod, but not a member.
I can see that it would not be a normal to install this mod on a board with no groups connected to forums, and without members. And a workaround would be to create a group and connect it to a forum to fix this. But I would think this should be found and fixed though, because sure enough, someone will have it running, then remove the group(s) to make the board open access... and notifying will fail.
I hope this helps.... your turn.