Assign issue does not lists users of group assigned

Summary

In gitlab you can assign members to projects in 3 ways:

A) Directly assign Users to projects via "Members" page.
B) Users are assigned via the members of the projects parent group.
C) Users are assigned via the members of a loose group which will then be added to a "parent group of the project".

We are using C) to manage our assignments. So we have several independent groups which acts as "Team container groups". These "Team container groups" are then assigned to project groups later on.

Unfortunately Issues "Assignee lookup" is broken and does not lists users from C)

Steps to reproduce

Lets imagine the following group hierarchy:

Root Group -> Project group 1 -> Project group 2 -> Project 1
Root Group -> Team group 2 -> Members

Notice that the Group "Team group 2" is used as a "container" group so that we can organize a teams members. Now what we usually do is to assign such a team group to a specific project group later on.

So in the previous example we did the following:

The "Team group 2" is added to the "Project group 1". Now, because the "Team group 2" contains several users, each of them can access "Project group 2" and "Project 1".

Unfortunately, it is not possible to assign members of "team group 2" to issues in "Project 1". They are not listed in the lookup, although they can access the project.