The explanation for that is - When you call a FreeRTOS API (such that xTaskCreate) before starting the scheduler, interrupts upto the priority configMAX_SYSCALL_INTERRUPT_PRIORITY are disabled and are only enabled when the scheduler is started. If you configure PRIGROUP to leave no bits for Group Priority, disabling interrupts upto configMAX_SYSCALL_INTERRUPT_PRIORITY would disable all the interrupts as there is no preemption priority. As a result, SVC will not be able to preempt the execution and would escalate to hard fault.