I've heard rumours DM Engagement groups no longer work..

Is this true? And if so why do they no longer work?

I think Instagram sees it as non genuine interaction/engagement when they see a bunch of accounts that keep liking your posts when they aren't following you. I think it games the system of making the explore page which Instagram wants to fill with content that people actually like and engage with. It is all part of the movement to tailor the user experience so people get exposed to more posts that Instagram thinks they will like.

(I hope this answers your question, even though it is poorly written lol)