XF 1.2 Usergroup/moderator privileges

Firstly, when I view what privileges the moderator group has I initially saw viewing threads etc. was not selected. Therefore, I changed required permissions to allow.

However, when I select no secondary groups, I see a permission denied error (after changing the user's group to moderator). Why is this?

Also, how (like the XenForo forums) can I add 'Cableturn Moderator' under the user's avatar?

Many thanks in advance :)