OK, I think I figured it out. I press the button with the two arrows to see 'Groups' instead of using 'Types' (not sure why there are these two options...) and so in fact the Groups were imported correctly. Also once I cleaned up the original keepass file, before exporting, I didn't get any duplicate entries any more. Seems keepass saves a 'history' (that I didn't know about) and in addition to that, a Recycle group, which then, when you view under 'All' in Wallet, looks like lots of duplicate entries. Deleting the Recycle group and getting rid of all history items produced a clean import.