Using hook_node_presave to auto-select a reference field from a field list selection
As Darvanen said above, the function name is wrong, replace HOOK by the module's name in HOOK_node_presave().
About the || operators, you could use in_array instead or a single associative array:

function grouphideandselect_node_presave($node) {
    $field_type = $form['field_type']['und']['#options'];
    dpm($field_type);

    $field_type_to_icon = array(
      1 =&gt; 1,
      2 =&gt; 1,
      3 =&gt; 1,
      4 =&gt; 2,
      5 =&gt; 2,
      7 =&gt; 2,
      8 =&gt; 6,
      9 =&gt; 6,
      98 =&gt; 6,
    );

    if (isset($field_type_to_icon[$field_type])) {
      $form['field_icon']['und']['#options'][] = $field_type_to_icon[$field_type];
    }
}


EDIT: from another question of yours I see that you already tried renaming the function to grouphideandselect_node_presave. You need to make sure that:
- the function's name is right
- the module is enabled
- you cleared Drupal's cache afterwards