Subgroup can not be created if parent group is private

Summary

If you create a subgroup in a group, which is private, you get the message

Visibility level internal is not allowed since the parent group has a private visibility.

This happens on a self hosted Gitlab 15.3.1 instance with all permission levels allowed. A quite similar issue is #26066 (closed) however with restricted permissions only.

Steps to reproduce

  1. Create group and make it private
  2. Create subgroup

There is no option that allows to define the new subgroup as private.

ITS-no-subgroup

Expected behaviour

Create subgroup as private, if parent group is private.

If the parent group has wider permissions (e.g. internal), offer this and more restrictive options (internal, private in this example).

Workaround

Create subgroup in another group that is internal only, then set to private, then move the new formerly internal and now private group to target group, which can be private. Note: one can select only target groups which are owned.

Edited by Roland