It often happens in teams projects that you have the same members in different teams and want to manage them centrally via a security group. Or you already have an existing security group and want to create a team based on it.
Microsoft has finally addressed the issue with the Nested Dynamic Azure AD Groups feature and can provide.
During the preview, a dynamic group can have up to 50 groups in its membership, and each tenant can have up to 500 dynamic groups that use the memberOf attribute in their membership rule.
This feature preview in Azure Active Directory (Azure AD), part of Microsoft Entra, enables admins to create dynamic groups that populate by adding members of other groups using the memberOf attribute. Apps that couldn't read group-based membership previously in Azure AD can now read the entire membership of these new memberOf groups.
Group membership in a dynamic group (preview) in Azure Active Directory:
Until recently, Dynamic Azure AD Groups have not supported the ability to include members from other groups in their membership (aka, nested groups).