Is 'but rather' considered grammatically correct?

Assuming you are referring to the clause "when a group of males and females is combined" then the answer is "Yes, it is correct." Because you are talking about a group (singular), the verb should be is. Were you to restate it: "when males and females is combined" it would, of course be wrong, and should be written: "when males and females are combined" because you are using a plural subject.

In response to what treehead asserted, the verb "combined" should be noted to be of great importance when revising the statement "In Latin, when a group of males and females is combined, the neutral plural form is not used, but rather the masculine is." The word "combined" is used to show that there are 2 or more things which are being brought together to create 1. Therefore, it would not be correct to say that a group(the already combined form) of two components(males and females) is combined. However, if "when a group of males and females is combined" is meant to refer to 'a group of males' and 'a group of females' being combined, the plural form 'are' should be used instead of the singular form 'is' due to the existence of there being 2 things. An object cannot combine with itself unless it were to disintegrate beforehand.