Trying to make a vellum activate with an expanding / transforming point group but it isnt working. I want the selected points to be active and the rest pinned and not moving.

Thanks

only position and orient is updated from the pinned points when Match Animation is on

if you want to update the pinning itself you need to do it within the solver, for example this are the changes I did to your file:
- renamed group2 to pin, no functional reason, just for readability
- set pin type to stopped (this is not really necessary as assigning i@stopped inside of the solver will do the same, but I left it like that)
- in the solver add POP Wrangle or Geometry Wrangle, set Input 2 to First Context geo :
- decreased the Bend Stiffness and Thickness just so that they bend nicely