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Thanks for the report Nagoor. I believe this is expected behavior. The Administrator checkbox means that this user is "super admin" regardless of any role his or she is assigned. This flag can't be set on creation by external auth source. Only administrator can mark other users as administrators.
There's a built-in role called Manager though that contains all permissions of Satellite and can be used to delegate administration to users. Once users have Manager role, they can do nearly the same things as these super admins. The only difference is that Managers can't modify Administer -> Settings page which is considered as system settings. Therefore in your case I think that the external group should be linked to an internal user group that has this Manager role. All users within this group should be able to do all tasks.
If they can not, please report each such occurrence as a separate issue. There were some of them, such as non-superadmin can't manage activation keys etc.
Please let me know if that clarifies it. I'm happy to answer further questions but I suggest closing this BZ as NOTABUG.