I posted my answer in your other ticket. For convenience I am pasting my reply here too, so the other users who experience the same problem can read it:
I discussed the case with my colleagues and it seems the problem is caused by the <li> markup element in the template with id="section-template". Also, data-type="group" should be used only to create grouped ListView. For convenience, I updated your jsFiddle example.
the Telerik team
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