It does let you select video groups for a Virtual Channel, just like selecting them for a Library Collection you need to scroll all the way down past all your TV Shows and Movies to find the Video groups.
I just created a Virtual Channel with some video groups, but can't figure out how to play the channel from the web UI (guess you can't).
Virtual Channel playback is a client only feature.
Thanks, that explains the errors in the log.
[ERR] Failed to start stream for ch10001: Virtual channels are not supported
[HLS] Couldn't generate stream playlist for ch10001-dANY-ip172.18.0.1: Virtual channels are not supported
[HLS] Stopping transcoder session ch10001-dANY-ip172.18.0.1
Did it give you the option to play it back in web? It shouldn’t have even done that. 
My Virtual Channels are showing up on the web, under the main Custom Channel I use...
When clicking on the airing to get the Watch button, it should not show. Can you provide a screenshot?
They certainly show up, but I didn't try to watch. I will try in a moment.
edit.
They show up with no option to play.
Yes they show, but you can't watch.
Live TV > On Now and Filter to Virtual Channel
I have 5 virtual channels and one of them has the play option, using the location you posted, the other 4 do not.
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