I think "inherit" only applies to node permissions. Child nodes can inherit permissions from their parent node, or permissions can be set at the child level.
User groups don't have parents, so inherit does not apply. I have never seen "inherit" in the list of user group permissions.
User groups are XenForo's primary method of assigning roles to the users of your forum. This allows you to assign permissions, titles and other customizations to users.
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