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Hello,

Ive read about the participial phrases that it acts like an adjective and modifies a noun. That what you mostly read about it. But then I found an article saying
"A participle phrase will most often be adjectival if it follows immediately after a noun. And a participle phrase will most often be adverbial if it provides extra information about time or place, but the key tests for determining if a participle phrases is adverbial is always movement and deletion."
Here they are talking about an adverbial function. Therefore, they have the following example:

"Hearing about the new assignment, the students groaned. (adverbial - can move to the end or delete)"

But the phrase "Hearing about the new assignment describes the subject(as every phrase does). So it doesn't describe the verb groaned. It describes the subject "the students". So who is right and who is wrong here?

An excellent question!

Yes, participial phrases do indeed have both adjectival and adverbial aspects, as illustrated respectively by [1] and [2] below.

[1] The boy kicking the ball is Simon.

Here the underlined participial is simply equivalent to a relative clause 'who is kicking the ball' and is purely adjectival.

[2] Hearing the news, I felt sad.

Here, on the other hand, 'hearing the news' - while still relating to the subject - has a clearly adverbial force, being equivalent to 'when I heard/upon hearing...'.

For ease of reference, I tend to label type [1] 'adjunctive' and type [2] 'disjunctive' to indicate the respectively greater and lesser level of 'connectedness' between the participle and its referent noun, but terminology may well vary, or simply be non-existent, regarding this distinction.