I cannot reproduce your issue with the code I have provided and the examples you have provided. As you can see, the results show SMAR-2363 - SFP.R.11.8 which you have noted is correct:

Version Table:

Issue IDFixVersion

1	SFP.R.11.8
2	SFP.R.11.7
2	SFP.R.11.8
2	SFP.R.11.9
3	SFP.R.11.7
3	SFP.R.11.8
3	SFP.R.11.9
3	SFP.R.11.10
4	SFP.R.11.8
5	SFP.R.11.8
6	SFP.R.11.8
7	SFP.R.11.8
8	SFP.R.11.8
9	SFP.R.11.8
10	SFP.R.11.8
11	SFP.R.11.8
12	SFP.R.11.8
13	SFP.R.11.8
14	SFP.R.11.8
15	SFP.R.9.9
15	SFP.R.9.10
15	SFP.R.10.1
15	SFP.R.10.2
15	SFP.R.11.7
15	SFP.R.11.8
15	SFP.R.11.9
15	SFP.R.8.9
SMAR-2363	SFP.R.11.8
SMAR-2363	SFP.R.8.9
SMAR-2363	SFP.R.9.9

Code: (altered only to change version column name to `MaxVersion`, and Issue ID column type to `any`)

let
    Source = VersionTable,

//Split digit and letter parts
    #"Split" = Table.AddColumn(Source, "SplitParts", each
        let 
            split = Text.Split([FixVersion],"."),
            letter = Text.Combine(List.Range(split,0,2),"."),
            digits = Number.From(split{2})*1000 + Number.From(split{3})
        in 
            [letters=letter, digits=digits],
            type [letters=text, digits=Int64.Type]),
   
    #"Expanded SplitParts" = Table.ExpandRecordColumn(Split, "SplitParts", {"letters", "digits"}, {"letters", "digits"}),
    #"Grouped Rows" = Table.Group(#"Expanded SplitParts", {"Issue ID"}, {
        
        {"Latest Version", each Table.Last(Table.Sort(_, {{"letters", Order.Ascending}, {"digits", Order.Ascending}}))
        
        
        , type [Issue ID=any, FixVersion=text, letters=text, digits=number]}}),
    #"Expanded Latest Version" = Table.ExpandRecordColumn(#"Grouped Rows", "Latest Version", {"FixVersion"},{"MaxVersion"})
in
    #"Expanded Latest Version"

Results:

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