You have a Microsoft Exchange Online tenant that contains the groups shown in the following table. Which groups can you upgrade to a Microsoft 365 group?
https://docs.microsoft.com/en-us/microsoft-365/admin/manage/upgrade-distribution-lists?view=o365-worldwide
when i check above link, we can see that ONLY GROUP1 can be selected. Nested is not allowed
You can only upgrade cloud-managed, simple, non-nested distribution lists. The table below lists distribution lists that CANNOT be upgraded.
WHICH DISTRIBUTION LISTS CAN'T BE UPGRADED?
Nested distribution lists. Distribution list either has child groups or is a member of another group.
Distribution list that only has members but no owner
Security groups
Dynamic Distribution lists
Answer A only. The reference is not the best choice, please use this, where all limitations are explicitly stated: https://learn.microsoft.com/en-us/exchange/troubleshoot/groups-and-distribution-lists/cannot-upgrade-distribution-lists-to-office-365-groups
This function has been deprecated :
https://techcommunity.microsoft.com/t5/exchange-team-blog/deprecating-conversion-of-distribution-lists-to-microsoft-365/ba-p/3668215
so question is no longer valid
When upgrading a nested group to a Microsoft 365 group, the parent group and all child groups will be converted to a single Microsoft 365 group. All members of the child groups will become members of the Microsoft 365 group, and the email addresses of the child groups will be replaced by the email address of the Microsoft 365 group.
WHICH DISTRIBUTION LISTS CAN'T BE UPGRADED?
Nested distribution lists. Distribution list either has child groups or is a member of another group.
Distribution list that only has members but no owner
Security groups
Dynamic Distribution lists
Only A is correct.
On-premises managed distribution list. No
Nested distribution lists. Distribution list either has child groups or is a member of another group. No
Distribution lists with member RecipientTypeDetails other than UserMailbox, SharedMailbox, TeamMailbox, MailUser No
Distribution list that has more than 100 owners No
Distribution list that only has members but no owner No
Distribution list that has alias containing special characters No
If the distribution list is configured to be a forwarding address for Shared Mailbox No
If the DL is part of Sender Restriction in another DL. No
Security groups No
Dynamic Distribution lists No
Distribution lists that were converted to RoomLists No
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