Here's a description from our academic support person:
Generally speaking, when we've got the permissions set so that gsi's can only grade their own students, they cannot import grades via .csv. The Import function appears to require gradebook.gradeAll
For instance, instructor1 is associated only with the group called Section 1, which includes student1.
In the GB2 interface, instructor1 can enter grades for student1. But if instructor1 tries to import a correctly formatted csv with student1 data, GB2 returns "You are not authorized to upload grades." Note that this error message appears after GB2 shows the Preview of Imported Grades.
As soon as you uncheck gradebook.gradeSection and check gradebook.gradeAll in Realms, instructor1 is able to successfully upload the same csv. Note, you have to make this change both for the site realm and also the group realm. And once you do that, then instructor1 can view and grade all students, not just his own.