Only Arabic language has this as default as on, and that is just for recent changes and not the watchlist

• Do any live wikis have this feature as default on?

Only Arabic Wikipedia is default on (only for Recent Changes, not Watchlist)

wmgEnhancedRecentChanges' => [
	'default' => false,
	'arwiki' => true, // T220186
],
'wmgEnhancedWatchlist' => [
	'default' => false,
],

• What are they currently grouped by?

They are grouped by the Page and the day. Different days will be different groups. Different pages will be different groups. Different user edits can appear on the same group.

• What implications would it have to any major changes we make to the change logs (e.g. if diff/hist will still be there) - because some parts of the standard log get moved to the top level and some stay in the individual rows under the grouping - it would be good to just scope anything that jumps out as hard to change if we were to edit the current layout of the standard change log

There is no expected implications of changes done by summary of Wikibase logs on old or enhanced (groupped) lists.

1- Enhanced list sub items follows a different convention (cur | prev instead of diff | hist) but tis is not relevant to Wikibase logs. Wikibase logs follows the same convention with the rest of the list.

2- Wikibase logs does not make any implications on old list view as well.

Seems like this only has community side work left to do, but is assigned to UX. Moving back to ready for dev for now, as no one has worked on it for weeks, and we need to keep the kanban board accurate to what we're working on.