It is just for primary usergroups really, although you'll see secondary usergroups change, what you have to understand is the way permissions work, if a users secondary usergroup has higher (better) permissions than their primary then they will always have the rights that the secondary gives, higher permissions always win!
You talk in your post about rankings, thats a totally different affair and you dont need extra usergroups for it, have a read here
https://www.vbulletin.com/docs/html/userrank_add