The rows are staying the same height - the size of the second TextBlock is changing, while the size of the first TextBlock remains 100.
To demonstrate this, make the following changes:
- Add ShowGridLines="True"to each of your Grids
- Change your named TextBlocks to show their ActualHeight as their text: -     <TextBlock Background="Red" Grid.Row="1" Name="textBlock2" Height="150"
               Text="{Binding RelativeSource={RelativeSource Self}, Path=ActualHeight}"/>
 
You will see that the SharedSizeGroup row will be the maximum ActualHeight of the two TextBlocks.
Update: A Short Project To Show What's Happening
I've created a quick-n-dirty project to show what's happening.  It turns out that when the right grid gets smaller than the original size, the left grid does an Arrange but not a Measure.  I am not sure I understand this completely - I have posted a follow-up question with this same solution.
Here is the solution that I created, based on your original.  It simply wraps the basic grid in a custom class that spews out info (via event) when Measure and Arrange are called.  In the main window, I just put that info into a list box.
InfoGrid and InfoGridEventArgs classes
using System.Windows;
using System.Windows.Controls;
namespace GridMeasureExample
{
    class InfoGrid : Grid
    {
        protected override Size ArrangeOverride(Size arrangeSize)
        {
            CallReportInfoEvent("Arrange");
            return base.ArrangeOverride(arrangeSize);
        }
        protected override Size MeasureOverride(Size constraint)
        {
            CallReportInfoEvent("Measure");
            return base.MeasureOverride(constraint);
        }
        public event EventHandler<InfoGridEventArgs> ReportInfo;
        private void CallReportInfoEvent(string message)
        {
            if (ReportInfo != null)
                ReportInfo(this, new InfoGridEventArgs(message));
        }
    }
    public class InfoGridEventArgs : EventArgs
    {
        private InfoGridEventArgs()
        {
        }
        public InfoGridEventArgs(string message)
        {
            this.TimeStamp = DateTime.Now;
            this.Message = message;
        }
        public DateTime TimeStamp
        {
            get;
            private set;
        }
        public String Message
        {
            get;
            private set;
        }
    }
}
Main Window XAML
<Window x:Class="GridMeasureExample.Window1"
        xmlns="http://schemas.microsoft.com/winfx/2006/xaml/presentation"    
        xmlns:x="http://schemas.microsoft.com/winfx/2006/xaml"
        xmlns:local="clr-namespace:GridMeasureExample"
        Title="SharedSizeGroup" Height="500" Width="500">
    <Grid>
        <Grid.ColumnDefinitions>
            <ColumnDefinition Width="Auto" />
            <ColumnDefinition Width="*" />
        </Grid.ColumnDefinitions>
        <Grid.RowDefinitions>
            <RowDefinition Height="*" />
            <RowDefinition Height="Auto" />
        </Grid.RowDefinitions>
        <StackPanel Grid.Column="0" 
                    Grid.Row="0"
                    Orientation="Horizontal" 
                    HorizontalAlignment="Left"
                    VerticalAlignment="Top"
                    Grid.IsSharedSizeScope="True">
            <StackPanel Orientation="Vertical" Width="100">
                <local:InfoGrid x:Name="grid1" Background="Green" ShowGridLines="True">
                    <Grid.RowDefinitions>
                        <RowDefinition Height="15" />
                        <RowDefinition SharedSizeGroup="Group1" />
                        <RowDefinition Height="15" />
                    </Grid.RowDefinitions>
                    <TextBlock Background="Blue" Grid.Row="0" Text="Row 0"/>
                    <TextBlock Background="Red" Grid.Row="1" Name="textBlock1" Height="100"
                           Text="{Binding RelativeSource={RelativeSource Self}, Path=ActualHeight}"/>
                    <TextBlock Background="Blue" Grid.Row="2" Text="Row 2" />
                </local:InfoGrid>
                <TextBlock Text="{Binding Path=ActualHeight, ElementName=grid1}" />
            </StackPanel>
            <StackPanel Orientation="Vertical" Width="100">
                <local:InfoGrid x:Name="grid2" Background="Yellow" ShowGridLines="True">
                    <Grid.RowDefinitions>
                        <RowDefinition Height="15" />
                        <RowDefinition SharedSizeGroup="Group1" />
                        <RowDefinition Height="15" />
                    </Grid.RowDefinitions>
                    <TextBlock Background="Orange" Grid.Row="0" Text="Row 0" />
                    <TextBlock Background="Purple" Grid.Row="1" Name="textBlock2" Height="150"
                           Text="{Binding RelativeSource={RelativeSource Self}, Path=ActualHeight}"/>
                    <TextBlock Background="Orange" Grid.Row="2" Text="Row 2" />
                </local:InfoGrid>
                <TextBlock Text="{Binding Path=ActualHeight, ElementName=grid2}" />
            </StackPanel>
        </StackPanel>
        <ListBox x:Name="lstInfo"
                 Grid.Column="1"
                 Grid.Row="0"
                 Margin="10,0,0,0"
                 HorizontalAlignment="Stretch"
                 VerticalAlignment="Stretch" />
        <UniformGrid Grid.Column="0"
                     Grid.Row="1"
                     Grid.ColumnSpan="2"
                     Columns="2"
                     HorizontalAlignment="Center"
                     Margin="5">
            <Button x:Name="btnIncrease" Margin="4,0">Increase</Button>
            <Button x:Name="btnDecrease" Margin="4,0">Decrease</Button>
        </UniformGrid>
    </Grid>
</Window>
Main Window Constructor (only code in code-behind)
public Window1()
    {
        InitializeComponent();
    btnIncrease.Click += (s, e) => 
        {
            lstInfo.Items.Add(String.Format("{0} Increase Button Pressed", DateTime.Now.ToString("HH:mm:ss.ffff")));
            textBlock2.Height += 30;
        };
    btnDecrease.Click += (s, e) =>
        {
            lstInfo.Items.Add(String.Format("{0} Decrease Button Pressed", DateTime.Now.ToString("HH:mm:ss.ffff")));
            if (textBlock2.ActualHeight >= 30)
                textBlock2.Height -= 30;
        };
    grid1.ReportInfo += (s, e) => lstInfo.Items.Add(String.Format("{0} Left Grid: {1}", e.TimeStamp.ToString("HH:mm:ss.ffff"), e.Message));
    grid2.ReportInfo += (s, e) => lstInfo.Items.Add(String.Format("{0} Right Grid: {1}", e.TimeStamp.ToString("HH:mm:ss.ffff"), e.Message));
}