This parameter sets the SPWeb.AssociatedMemberGroup property :
using (SPWeb web = ...)
{
web.AssociatedMemberGroup = someGroup;
web.Update();
}
You can use .NET Reflector to test it yourself - decompile the assembly Microsoft.SharePoint.ApplicationPages.dll
and find the method BtnMakeDefaultGroup_Click
in the class PeoplePage
.
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