I propose adding a setting in Firefox that allows users to define how many recently closed Tab Groups are displayed in the "List all tabs" menu. This would provide more flexibility for users who heavily rely on the Tab Groups feature for their workflow.
This option could also be an entry in the about:config page. This would provide the desired flexibility without cluttering the main settings interface
alternatively, there could be a different button (instead of the "list all tabs" button) which would directly show the menu currently accessed through list all tabs>show all