Correct on being ungrouped.

you're right that you don't get full xp, it is something around 75% though. The key is that the mob is green to the kill squad. If the mob is grey, you will get no xp.

Basically the goal is for the levelee to be going after oranges, and the kill squad to be going after greens/yellows.

I completely understand about keeping the unity of your box team, this is more for single character level advancement.