This is the reply from Whatsapp below. Looks like the problem is with Sony's version of Android 7.0.. Please help to check internally on this.
#- WhatsApp Support -##
Hi,
Thank you for the screenshots.
It appears all your settings are correct for LED notifications. In our test devices, we reproduced the same LED behavior on multiple device which is expected when a group is muted. While we expect consistent LED behavior across all versions of WhatsApp, unfortunately the LED notification system is provided by the manufactures which can lead to unexpected behaviors. It appears that updating your device may have produced an unwanted behavior in your instance, however in our testing it appears to be working as expected.
If you have any other questions or concerns, please feel free to contact us. We would be happy to help!
Ivan
WhatsApp Support Team