1. To clean or adjust your appearance and make it presentable, no matter what you were just doing.
2. To gather your entourage before a party, or gather people from a lame party to go to a better one.
"Don't rush me, I was just taking a piss and I need to regroup and come back strong."
"This party is lame let's regroup and go to a better one."
To step back and reevaluate your plan of attack after going through a stressful or unpleasant situation. It can also mean to simply take a moment to calm yourself in order to be more effective after the stressful event.
I had a meltdown in the middle of serving a party of 20 Karen's at the restaurant I work at, so I had to regroup. Even worse, they were mostly boomers.