Ok I think I figured it out:
It’s not ACF breaking it, though it’s related. ‘wp_update_term’ if you don’t specify a value for an argument it uses the default. So my guess is it’s grabbing what’s in the database already and overriding what you’ve specified in the form.
A work-around, is instead of using the ‘wp_update_term’ function is to just do:
global $wpdb;
$wpdb->update($wpdb->terms, array('term_group' => $value), array('term_id'=>$term_id));