Ability to connect existing SharePoint team sites to Office 365 Groups is coming later this year

Hi all - yes our plan is to provide the ability to connect only root site collections to new Office 365 Groups.  We've considered enabling subsite-to-group connections, but there are enough gotchas both architecturally as well as from a design standpoint in delivering an experience that is comprehensible to most humans.  One example is that when we start rolling out classification-based policy (e.g. Confidential classification equates to group guests being disabled, SharePoint external sharing turned off, etc. - this is just an example for discussion), those policies apply at the site collection container level.  If we enabled subsite connection to groups, we would have to deal with site parent-child policy conflicts, inheritance-based permissions, etc.  Not saying it's impossible but cleary stands in the way of shipping an experience sooner. 

Having looked at all site collections in the service, the vast majority are flat (i.e. no subwebs), for which this experience should work seamlessly.  That said, we acknowledge that there are some very active site collections with subsite hierarchies.  For these subwebs, there are a couple of paths to get to 'modern'.  One is a migration effort from subsite to root site collection, and then connecting the collection to a new group with the feature described in this thread.  The other, is a 'modernize this site' type of experience that brings the classic subsite to the modern experiences without a group connection.  This is also a body of work we are investing in and will share additional details in the future.

Hope this helps to clarify.  We'll definitely be talking more about this in the coming months as we make progress on the feature.

Thanks