Hi @john john ,
We can add nested group to SharePoint site permission. But you have to make sure Group A and Group B are Security groups.
We don't currently support:
- Adding groups to a group synced with on-premises Active Directory.
- Adding Security groups to Microsoft 365 groups.
- Adding Microsoft 365 groups to Security groups or other Microsoft 365 groups.
- Assigning apps to nested groups.
- Applying licenses to nested groups.
- Adding distribution groups in nesting scenarios.
- Adding security groups as members of mail-enabled security groups
For Reference: Add a group to another group
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