The OG field settings control panel isn't confusing because it has a lot of stuff on it.
In fact, it's just the opposite - there's not too much to see at Admin > Configuration > Organic Groups > Organic groups field settings. Due to this compact layout, it leaves a user wondering if something is missing.
Once the panel is broken down and explained it will all make sense.
Bundles field = this is where all of your fieldable entities are located...including your brand new group node type
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If you look carefully at the organization in the Bundles field, you'll notice a particular hierarchy there. Items are split out by their entity type (node, file, user, etc). You'll find your new group node type under the node category in that drop-down box.
Fields field = this the collection of available fields for the bundle you choose.
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Pay attention to the categories that the selection items fall under when you open the drop-down. There are two categories, group and group content.
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For this group node, we're interested in the items that are listed under the group category - these are items that exist for your group node type - which is a very special type of node. Don't worry, though, we'll tackle the other items in a later section.
Entity tab set at the bottom - this is where all of your different OG entities are. You'll see your group node entity in the left hand column. If you click on that tab, you'll see it's panel appear.
After you select a bundle and the field you want for that bundle, your new field will appear within its entity tab, as shown below.