Memberships not updated when composite group modified

1. I created a group A and added two direct members Subject X and Subject Y.
2. I created a group B and added one direct member Subject Y.
3. I created a composite group C that is A\B (the complement of B within A). It has a single indirect member X.
4. I created a group D and added a single direct member of group C. Group D also shows Subject X as an indirect member.
5. I modified the composite group C so that C is now A U B (A union B). Group C now has two indirect members Subjects X and Y.
6. I looked at the member list of Group D. Group C is still a direct member, but it is the only member of D. I had also expected to see Subjects X and Y as indirect members.