Smart groups appear as a normal group if added to the group manually

See Stuart Gaston's civicrm.org/civicrm record (contact id 670) as an example.

newsletter (group id 120) is a smart group.

for some reason, the smart group is appearing in the list of groups that you can add a contact to on the contacts tab even though it is a smart group. if you add the contact to the list (which happened in stuarts case) it appears in the list of normal groups even though it is a smart group.