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Platform admins (and probably CO admins) cannot create nested groups because the view file

View/CoGroups/nest.ctp

includes

  if(($permissions['buildnest'])

    && isset($co_groups[0]['CoGroup']['id'])

    && !empty($permissions['owner']))

    // && in_array($co_groups[0]['CoGroup']['id'], $permissions['owner'])) // XXX check this

    $e = true;

but a platform admin is not an owner of a group and a CO admin does not need to be either.