Does the user already have elevated privileges (Admin or Global Moderator)? Are you able to add non-privelaged users? Can you assign the users via Member Management?
Yes, they are already Global Moderators which have not been assigned to all the forums. They were assigned to some of the forums in past pre 7.6.
I can assign a regular non privelaged Users successfully using the CP > Moderator.
I can assign the Global Moderators / privelaged user through CP Member mgmt process as a Moderator to specific forum.
NOTE: The non privalaged user when added to forum as Moderator was added to the Moderator user group using CP > Moderator. I should have expected that. i should have also realized when I unassigned them as a moderator for a forum, I still needed to remove them from Moderator group. A dah moment