@drMerry - I think the simplest solution to your issue right now is to do Show all book exemptions, remove all those ones in that group, and instead use a search restriction before you search for duplicates.
The problem I believe is due to the way exemptions are stored, as every book is being stored as being exempt with every other book. This isn't a scalable approach if (as you have) your group contains a massive number of books.
Right now I will see what others think on the dev thread about how we solve it - either we prevent you marking the group as exempt in the first place by putting in a threshold, or we change the way exemptions are stored. However you have a workaround in the meantime I believe.
In what I would term "normal" usage your exemption groups should not be very big - the 99% scenario I perceive as being 2-3 books/authors in a group. However allowing very fuzzy searches and in your case storing a large number of near duplicate titles as people will have who store magazines etc this situation will arise.