Learn@UW - Unenrolled Users Appear in the Group-Filtered list in Email Address Book
If you use the Email Address book "Filter By" menu to send a message to a course group, the list of email recipients will include users who have been unenrolled from the course if they were once a member of the group.
The user does not appear in the "Filter By" menu for the entire class; the error only occurs in the group-filtered list. Note that user transfers between groups are accurately reflected in the Email Address book filtered lists.
In the following example, a student named 'Test4.Student' who was in a group was subsequently un-enrolled from a course.
Address Book Filtered by the Entire Class
Address Book Filtered by One of the Groups
This is a known issue.
A workaround is to send email from the Classlist. Filter the Classlist to show the desired group and then click "Email everyone on this tab." Your email message will be sent to the proper recipients.