License inheritance is the flow of a group-assigned license to a user through group membership. In Microsoft Entra ID the flow is one level deep by design: per Microsoft documentation, only direct user members of the licensed group receive the license, and nested groups do not propagate it.
Why the path matters more than the fact#
Knowing a user has a license is trivia. Knowing every source answers the operational questions: what to change to remove it, what else changes when you do, and whether a second source will silently keep it in place. Every safe licensing change starts with the complete source list.
The one-level rule explains cost surprises in both directions: adding users directly to a licensed group licenses all of them at once, while nesting a group under a licensed parent licenses nobody in it, despite what the hierarchy suggests. Both surprises are structural, and both are invisible in flat lists.
VisualizerEngine
Inheritance in VisualizerEngine
Inheritance mapping is a first-class feature: for any user, the exact path each license travelled through nested groups, drawn as a chain. Overlapping sources, per-user conflicts, and disabled service plans are tracked alongside, and removal impact analysis shows exactly who loses what before an unassignment.