Moved project which had public visibilityto a group with private visibility

We have moved a group that was set for public visibility to be a subgroup of a group which is locked to private visibility

Unfortunately that leads to a situation where you can not correct the visibility level for the project, even though it shows as being stuck on public visibility

Shows the visibility selection, with the options greyed out. I know we can go through the sub groups and projects of this group to change them individually, but should the visibility level of the group, it's sub groups, and project not be changed during the move of the group. Or alternatively should it not be possible to make the change and make it flow to all sub level items?