Adding Group as Member of another Group doesn't work

I have a group X and a separate sibling group Y under my main group A. I added group Y as Maintainer to group X, however one of the developers couldn’t see a project to examine it’s example code. I had to explicitly add the developer to the group X for him to see the project with read/clone access. Can you tell me if this is by design, it doesn’t appear it should work this way.