The Lost & Found group set has special properties. Chances are that you will never see this group set. It appears only in very specific situations. This is one example:
You open your library with EndNote.
You create a group set and a group of references within the group set.
You then move the library to another machine.
You open the library with an older version of EndNote. The earlier version of EndNote did not include the group set feature and so it ignores your group set information.
You save changes to the library.
You move the library back to the original machine and open it again with EndNote.
EndNote remembers that you have a saved group, but it does not know under which group set it should be located; so it places the group in a Lost & Found set.
The Lost & Found group set is a temporary holding place. You cannot add to any groups to this set, rename them, or search them. The only thing that you can do is drag a group from this set to another group set. Once you do that, all functionality returns to the group. Once you have moved all groups from the Lost & Found set, the Lost & Found set is removed.