Mostly depends on how much space there is on the screen for notifications. If there is more space then things might not group as early as they otherwise might if there was less space. Some other factors play into it all as well.
I've been playing around with that and even with that it seems that free screen space might be playing a factor, given that I've had some notifications from a single app that still showed up as individual ones that weren't grouped even though the setting for that app has been set to "By App" instead of "Automatic".
I believe if it's set to automatic then the app can have some controls related to it where it could tell iOS to group things by sender or thread or something like that. That said, it's quite possible, if not even likely, that there might be some glitches with it all and/or some enhancements and improvements that could and perhaps will be implemented over time (hopefully sooner rather than later).
