The cheerleader effect is the cognitive bias that makes people think individuals are more physically attractive in groups than in isolation.
The effect doesn't result from that group photos give the impression that individuals have more social or emotional intelligence. This effect is proved by using individual photos grouped together in a single image (collages of people alone), rather than photos taken of people in a group.
In the research Hierarchical Encoding Makes Individuals in a Group Seem More Attractive, the authors claimed that this effect arises because our asymmetries and disproportionalities tend to "average out" amid a group of faces, and our weird faces are perceived as slightly less weird.
In another paper A Group’s Physical Attractiveness Is Greater Than the Average Attractiveness of Its Members: The Group Attractiveness Effect, the authors proved that the Cheerleaders Effect (they called GA-effect in the paper) occurs in female, male and mixed-gender groups. Furthermore, they found that the Cheerleaders Effect (GA-effect) is more likely to occur in a larger group (six or more group members) than in smaller groups.
However, a replication study failed to show any significant results for the Cheerleaders Effect. The research team hypothesized that this may be due to cultural differences since the replication was conducted in Japan.
Special thanks to Bryten Foongsathaporn for introducing the concept to me!