Newly registered members dont appear in Activity Stream

I understand exactly what you are saying. Dana (who responded above) isn't familiar with BuddyPress because she has never used it. She only uses WordPress.

The Gravity Forms User Registration Add-On does not use the BuddyPress user registration functionality. It registers the user directly in WordPress. It doesn't trigger any specialized BuddyPress functionality when doing so beyond the BuddyPress profile fields.

I will discuss this with the developer on our team that works on the User Registration Add-On tomorrow and explain to him what is happening. I will have him look at what needs to be updated to make sure that new users to appear in the member directory as well as the activity stream. I am a bit surprised that users don't appear in the member directory automatically, but there must be some sort of custom user meta that isn't being created that is preventing the user from being included.

We'll take a look and see what needs to be updated in the Add-On so that these features are supported and will get them included in the next update to the User Registration Add-On. If it's a minor change I will try and get it pushed through so we release an update that resolves these issues later this week.