Layer Groups are, by default, set to display blending effects (such as opacity, blend modes etc.) just like any other layer in Photoshop. For example, if a layer in a Layer Group has it’s blend mode is set to “Multiply”, it will be multiplied (blended) with all other layers below it. In this default state, clicking on the Layer Group in the Layers panel displays “Pass Through” as the Layer Group’s blend mode (i.e: any blending applied to layers within the group is “passing through” the group to be applied to the layers below it).
To change this default behavior and limit the blending between layers to only those layers within the Layer Group, target the Layer Group in the Layers panel and set the Layer Group’s blend mode to “Normal”. Note: the circles are still multiplied within the Layer Group (if each layer was set to Normal instead of multiply, all of the circles would appear the same color, but not the Background (because the Background is not in the Layer Group).