this doesn't make any sense...
none the less that is the behavior I have observed. Hence why I said maybe there is a bug.
There probably isn't much value in nesting groups
I use it to give alternate names to a device/Group (Group with one item) IE Downstairs/Basement and "Master Bath"/"Master Bathroom".
I also nest them to make to make logical collections so I can be specific in what I turn off/on
Here is an example (not everything) of some nesting:
Everything
_Upstairs - many groups and devices
_Basement
__Downstairs
___CraftRoom - 2 lights
___PlayRoom - 4 lights
___BackRooms - 4 lights