See group round about in image
If the nature of the smart object is vector, any resizing of the group will retain the original quality in all cases. (But masks are raster in your screen shot. Those raster masks will be interpolated)
If the nature of the smart object is raster, only reducing the group retains the original quality. If you enlarge the group above the size of the original raster objects, you degrade the quality the same as you would enlarging a non-smart object raster image.
Smart objects, in a group or not, always references the original image/object when you transform them.
Smart objects do not improve content. They only wrap the original content in a container which tells Photoshop the original size, dimension, and nature of the object. This allows Photoshop to always go back to the original when you transform things.
For example: You have 2 layers - one a smart object layer of a raster image. They other a standard pixel layer of the same raster image.
You select both layers and reduce them 50%. They look fine.
Then you select both layers and enlarge them 200% - Back to the original size they were.
The Smart object layer will look exactly like it did at the beginning. The pixel layer was interpolated when reduced, then interpolated again when enlarged. The pixel layer will look markedly worse than the smart object layer.
If the nature of the Smart Object is vector none of this matters. Quality will always be the same.
So, just asking "if a smart object retains quality" is not a straight-forward answer. What matters is what the smart object consists of. Being a group or not, makes no difference.
Yes, they will keep the quality unless you Rasterize it.
Yes, they will
When you resize Smart Object (alone or within a group) it will retain it's original quality (good or bad).
For example: If image was 200x200px before you made it a Smart Object, and you stretch it to 400x400px it will still look bad as if you stretched regular object. The difference is that source image information is preserved in Smart Object (and not in regular/raster object) so you can do all kinds of transformations without losing quality.
if you wanted to increase size of your object without disturbing its quality then you can do following thing :
In Photoshop, select pen tool or shape tool now you will have three options on left side in Tool option bar: 1)Shape 2)Path & 3)Pixel. Now select shape option & start creating the objects(xyz).
Henceforth, you can increase or decrease the size of this objects(xyz) as much as you want, it wont disturb quality of your objects, you can give different outline styles to the objects as well. if you create objects by selecting shape option, it becomes very easy for you to edit such objects.