I’ve seen the same behavior and I figured that was be design. What sort of use case do you have where the same Item would be a member of more than one Group? The typical flow is an Item is a member of an Equipment Group which is a member of either another Equipment Group or a Location. In rare cases, an Item would be a member of a Location Group directly.
If an Item is a member of more than one Group it implies that the Item is in two different places at the same time.