Hello,
The thing is that currently only persons are supported as owners/managers of AD objects in Approval Requests. So, in other words, if a group is directly added as an approver, this will work. However, if a group is added as an approver with the help of the Manager of the target object is Approver / Owner of the target object is Approver options, this won't work.
We were planning to add this functionality later, but since you require the functionality right now, we'll try hard to include the support for this in Adaxes 2013.2 to be available in late September.
By the way, a side note to this. If you specify an AD group as an approver, you don't need to use an additional Distribution List or whatever to send Approval Request notifications to all members of the group. Whenever Adaxes needs to send notifications to approvers, and one of the approvers is a group, Adaxes sends a notification to each member of that group separately. So, all members of a group that have e-mail addresses specified in AD will get a notifcation anyway.