I was able to get this to work with a Google Group by adding the category’s incoming email address to the group’s members page. I’ve set the group up just for testing this, so I gave it the most relaxed possible permissions. The issue you are running into could be related to the group’s permissions.
Here’s what the category configuration looks like on my Discourse site:
Note that the full value of the Custom incoming email address field is:
discourse-group-test@googlegroups.com|sc_email_test+scossar-mailing-list-5@discoursemail.com
The Google group’s ‘from’ email address and the category’s incoming email address are separated with a pipe (|) character. Discourse should configure this automatically for you when you enter the group’s from address into the category’s incoming address field and save the category. The address that I used to subscribe to the group is the category’s incoming email address (sc_email_test+scossar-mailing-list-5@discoursemail.com)
Conversations are showing up in my category:
I’ll be deleting the group and the test site soon.