Hi Blossom
I used to be a Y5 teacher. It's hard to say what might be going on without knowing on what basis the groupings/ assessments were made. I know that I have taught children who've read fluently and beautifully and were excellent at retrieving information, but were not so good as some weaker readers at reading the subtext and finding the nuance. So I have had groups of apparently "good" readers mixed with not-so-good readers based on the depth of discussion around the texts. I would say 4C sounds really quite decent, though I confess to real displeasure at grading/labels, especially if as a result of a test. But I digress...
Hopefully your son's teacher is approachable and relaxed. Teachers do feel like they have the criticism coming from all angles, so it is understandable to find one's back up, iyswim. In any case, I would see her at home time if she is an easy going type- otherwise perhaps a note would be better so as not to catch her at a bad moment- just asking if you could arrange to have 5-10 minutes of her time later in the week after school. It would probably help to say that you want to discuss your son's literacy work and group.
When you do discuss it with the teacher, it will come across better to her if she feels that you are not judging her as the professional, but trying to understand and make sense of it in order to help your son at home. If you stress that you sit with DS when he does HW, and that his HW has been unchallenging, that might help the teacher. She has only known him for a week. It could be that he is giving the "dunno"s to questions in class, and she thinks he really doesn't know. In any case, the statement you've just made about the work being right for your son (as opposed to his place in a group) is what you and the teacher share, so she should see this as a common interest with you.
Best of luck. Let us know how it goes