Thank you very much for your feedback and the GraphML file.
Actually, self-loop edges do not prevent yEd's "View Group Content" action from working. However, when you select a node by clicking on it, yEd usually selects the bends of all self-loop edges as well. And the "View Group Action" only works if one group or folder node is selected and nothing else.
Try unselecting all the bends after selecting the group node before double-clicking the group.
I admit that having to unselect self-loop bends is quite inconvenient. We will think about allowing "View Group Content" even if some bends are selected as well as a group or folder node.