I had miss guided hope that I could use one query that would group the results but in the end, the solution is to look up all custom_taxonomy 1 results passing the slug into the Post query and looping it.
Because of all the different combinations of filters, I had to create a query builder that dealt with this for me.
In principle, these solutions will work. How to group by taxonomy on Custom Post Type archive
how to group custom post type posts by custom taxonomy terms
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