Once you have your baselines defined and configured, even if that means using the default predefined baselines created by AWS, you can then choose to create patch groups if required.
Patch groups are exactly what you would expect them to be: they allow you to associate a number of instances with a group, which is then associated with a single patch baseline. This helps you to organize your instances and patches more easily by grouping similar instances together, perhaps within the same environment. For example, you could group together all Windows instances within your test environment.
Also, any instance that is not associated with a patch group will automatically receive the default patch baseline for that operating system.
So, when a task is run to apply patches to your instances, SSM will know whether the instance belongs to a patch group. If it does, the associated patch baseline of that group will be used to apply...
