Dedupe contacts in group searches outside of group

When running a contact dedupe on a group, it appears that civi searches outside of the group as well.
Recreated this on the demo site. Steps to recreate:

1. Create two contacts that match dedupe rule threshold (ie same email address)
2. Add one of these contacts to a group
3. Run a dedupe find on contacts in that group (should just be one contact)

Civi then finds both contacts.

Because of this, running a dedupe on a large database is impossible even when using groups.
The process always runs out of memory (in our case 16 GB).