I am trying to add an individual user and a user group to a reading team and the system doesn't let me
You are only able to add one or the other to a policy's reading team.
If you are looking to add both an individual user and a user group to a policy's reading team, you would need to either add the user into the user group or create a new user group with all the users that you are looking to include.
See this helpdesk guide on creating and editing user groups.