This is happening on upstream too. I'm checking the reason and will submit a fix.
Created redmine issue http://projects.theforeman.org/issues/18739 from this bug
Patch submitted upstream https://github.com/theforeman/hammer-cli-foreman/pull/287
Upstream bug assigned to dlobatog
Moving this bug to POST for triage into Satellite 6 since the upstream issue http://projects.theforeman.org/issues/18739 has been resolved.
Verified on Sat 6.3 snap 12, nested hostgroups are now displayed correctly in the output of hammer host list
Since the problem described in this bug report should be resolved in a recent advisory, it has been closed with a resolution of ERRATA. For information on the advisory, and where to find the updated files, follow the link below. If the solution does not work for you, open a new bug report. https://access.redhat.com/errata/RHSA-2018:0336