Okay, I tried enabling that and now subaccounts are given the correct usergroup.
However, it doesn't seem to make sense to have the "parent usergroup inheritance" control a setting that has nothing to do with inheriting the parent account's usergroup. I don't want my subaccounts to inherit the parent's usergroup. I just want all subaccounts to automatically be given the usergroup.
Right now this is the only way to make it work the way it looks like it's supposed to, which isn't very intuitive:
It works at least. But if you're looking for improvements, I'd just recommend detangling that setting from the parent inheritance, because it doesn't look like the two settings are connected at all and I feel like they aren't supposed to be connected.