Count with GroupBY does not count the actual number of records, shows as 1 only

I have this simple sample that I'm working with. I have 2 records that are the same, and I'm just trying to roll these two records up so that it shows 2 as count since X and Y are exact

WITH test AS (
    SELECT '11' AS X, 'BYE'AS y
    UNION
    SELECT '11' AS X, 'BYE' AS Y
)

SELECT x, y, COUNT(x)
FROM test
GROUP BY x,y

Solution

The problem has nothing to do with the COUNT nor the GROUP BY and everything to do with your UNION. Your CTE (test) only provides one row as a UNION query returns distinct rows and you only have one distinct row. Use UNION ALL:

WITH test AS (
    SELECT '11' AS X, 'BYE'AS y
    UNION ALL
    SELECT '11' AS X, 'BYE' AS Y
)
SELECT x, y, COUNT(x)
FROM test
GROUP BY x,y;

Better yet, don't use that old style and use a VALUES table construct:

WITH test AS(
    SELECT x,y
    FROM (VALUES(11,'BYE'),
                (11,'BYE'))V(x,y))
SELECT x, y, COUNT(x)
FROM test
GROUP BY x,y;