Why is Auto Scaling Group not taking Security Group from Launch Template?

First created a Launch Template with Auto Scaling Guidance (no Networking info except providing Security Group)

Next created Auto Scaling Group in the console. As the launch template is selected in the first step, it can be seen that the security group IDs is just a dash (-), which indicates that the Auto Scaling group is not taking the Security Group from the Launch Template. Moreover, there is no way in this screen to override/correct the security group.

Confirmed this when the Auto Scaling Group creates the instances - those instances have the default security group instead of the one specified in the Launch Template.

Could this be a bug or a pebcak problem?