The problem that i have is shown on screenshot 1 and my list of plugins on the server is shown on screenshot 2
For some reason groups dont want to use color codes.

This does not look like an issue with LuckPerms, but rather EssentialsXChat. For proper handling of prefixes, use the prefix functionality of LuckPerms.

Read more about prefixes here.

EssXChat doesn't seem to support using color codes in group names.

Perhaps you mean to set a prefix instead?