That kind of nesting often leads to issues with permissions. People get permission you don't expect and it is hard to figure it out. I've been there and don't do it any more.
To my knowledge, there is NO limit. But the more you nest groups you would have performace impact while searching for users.
However, I am not sure if there are any limit from database side.
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because the list shows me only 200. and I cannot see the rest :(
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