Group Testing: A New Weapon in the Fight Against Syphilis
blog.shriphani.com
blog.shriphani.com
That was precisely the reason. The paper mentions that they only collected enough for the group-level and subsequent exhaustive search.
The second largest n one could choose is half the population by dividing into two groups. It's the most optimal n if the expected number of infected soldiers is around 1. Since we know the percentage of infections is a lot more than 1, the largest n isn't optimal. Otherwise, if 1 person in each group is infected, you'd be back to square one and your initial test of two cocktails of each half of the populations' samples was fruitless.
...etc...
At p = 0.01, the optimal n is, according to this article, around 20-25.
It only works well if a small percentage of the population is infected.