This plugin was EXACTLY what I was looking for! I only have one issue with it.
I'm the only one (super admin on a BP multi-site install) who can actually create sub-groups.
I created a dummy id to test. When I log on as "me," go to groups, I can create member groups like gangbusters.
I log off, log in using the dummy account (checking settings to be sure that anyone can create member groups), and...the button just isn't there.