Given Group A and Group B, Group C should only contain people who are members of both Group A and Group B.

For example :

Create Group A and add person 1 and person 2 as members.

Create Group B and add person 2 and person 3 as members.

Create Group C and check “Require All for Nested Memberships”.

Add Group A as nested group of Group C.

Add Group B as nested group of Group C. 

Group C has all members of Group A as members (person 1 and person 2 instead of just person 2), which is incorrect, even after reconciliation.