Quoted from (Feature Request: Folders Within Folders (Or, Groups Within Groups)).
Folders within Groups, or Groups within Folders, or Nested Folders/Groups is an occasionally asked for feature.
Obviously for most users, with even a hundred macros, this is overkill, so it is a feature largely appropriate more to serious power users than general Keyboard Maestro users (for myself, even with 70 groups and 1000 macros, I can’t remember ever wishing for another level of groups, although the group list is a little longer than practical).
The problem with the concept is largely the extra UI and cognitive complexity it entails. Currently Macro Groups have a very clear purpose centred around macro activation. Adding another level (or levels) complicates that concept dramatically. Does each level control activation. Is activation some sort of “and” condition of all the parent macro groups? Etc. Its not that it couldn’t be made to make sense, but it is a lot of complexity.
In any event, I have no plans for adding multiple levels of groups for Keyboard Maestro 8, so it’s not a solution that will help you any time in the next several years.