Troubleshooting: The user does not exist error or is not unique

Today I was rebuilding my VM as a result of some issue with the old VM. An authenticated claims user when added to a SPGroup threw the following error:

The user does not exist or is not unique.0x81020054"} System.Exception {System.Runtime.InteropServices.COMException}

I banged my head for some time before found out the problem was in the setup of WebApp. In my case, the WebApp had 2 STS Providers so it was pointing to the wrong STS Provider, which was causing the user to be not added to the group. However, the user was an authenticated user who could be directly assigned access to a resource, but not added to the group. The user was added and viewable from this URL-> http://YOURSERVER/_catalogs/users/simple.aspx.

The above solution is only applicable if you are using Claims Based Authentication.