We are a group of 8 agencies that work together as one. To us, a group is an agency. I had set up our groups with a few sub-groups originally and some of those were a users home group. We no longer do it that way but it didn't break anything while we using sub-groups.
There are a few caveats though, none of which are due to WF funcionality. It has more to do with remembering what subs belong to which parents and will a change to the parent adversely affect the sub. Group admin functions also get a bit more confusing because of course what you do to the parent affects the child‚Ķ even if you forgot that! 😒
For us, some structural changes in the company made it more efficient for us to break out the sub-groups into regular groups. I do recollect it working exactly as expected though.