Room light not working as expected

Room Lighting can import from the older Groups, Scenes, and Scene transitions. If you're starting from scratch just choose new automation.

Fill in the 'Command with Activator Device'. It creates a device in your list of devices and that is what you use in your Button Controller app. One of the submenus under means to activate there is 'Select Indicator Use'. There are 2 choices for groups. Make one.

The help documentation is reasonably comprehensive:

If your lights are Zigbee this is useful: