But it will add the AD DN
This behavior is by design.
If I want to add LogonName, what parameters should I enter?
You can use a text parameter and manually enter the required username into it. Alternatively, you can keep using the AD object picker parameter and use a script instead of the Create an Active Directory object action. The script will get the username of the selected account and create the group. If latter is the preferred approach, please, post here or send us (email@example.com) a full screenshot of the Create an Active Directory object action. Should there be other parameters used (except for PM03 and PM07), please, specify the parameter types.