Status of Bug #3038?

Yes we agree completely, and I look forward to having ACL's implemented this way, but my point was that the groups above are children of a common group.
So
Parent
- Group 1
- - Group 1a
- Group 2

So members of Parent, can be managed by group 1a, as they are in the same branch.
Members of Group 2 are of course inherently members of Parent, but not in the CB way of checking access, so what I did was to expressly give users of Group 2 an additional membership of Parent, and thus, because of that membership, they are manageble by Group 1a.

This worked in CB 1.7 with the 3038 patches published originally, but has stopped working in CB 1.8 RC.

The question though is, how much effort should be used to solve this (again), and that depends on the timeline for getting ACL support in CB moderators

So members of Parent, can be managed by group 1a, as they are in the same branch.

Right, that's correct.

Members of Group 2 are of course inherently members of Parent, but not in the CB way of checking access, so what I did was to expressly give users of Group 2 an additional membership of Parent, and thus, because of that membership, they are manageble by Group 1a.

Group 2 shouldn't be manageable by Group 1a as it's a different branch.

This worked in CB 1.7 with the 3038 patches published originally, but has stopped working in CB 1.8 RC.

The original patch was bugged and barely tested. It allowed for certain users to edit other users which never should've been the case. Base off your needs you should have the below setup.

Parent
- Group 1
- - Group 2
- - - Group 1a

The question though is, how much effort should be used to solve this (again), and that depends on the timeline for getting ACL support in CB moderators

It is fixed, what you had experienced was basically a bug of a bug fix. It's now functioning in the same regard Joomla would understand it to function. At any rate we're moving away from usergroups and understand it to be working properly now. CB 2.0 will eliminate pretty much all usergroup usage except for assigning those groups to users and setting the permissions for those groups.