shadow/man/login.defs.d/USERGROUPS_ENAB.xml

<varlistentry>
  <term><option>USERGROUPS_ENAB</option> (boolean)</term>
  <listitem>
    <para condition="no_pam">
      Enable setting of the umask group bits to be the same as owner bits
      (examples: 022 -> 002, 077 -> 007) for non-root users, if the uid is
      the same as gid, and username is the same as the primary group name.
    </para>
    <para>
      If set to <replaceable>yes</replaceable>, <command>userdel</command>
      will remove the user's group if it contains no more members, and
      <command>useradd</command> will create by default a group with the
      name of the user.
    </para>
  </listitem>
</varlistentry>