An example of adding "user can" checks on the "create_subgroup" capability

hgbp-user-can-create-subgroup-depth.php

<?php 
add_filter( 'bp_user_can', 'my_create_groups_cap_change', 20, 5 );
function my_create_groups_cap_change( $retval, $user_id, $capability, $site_id, $args ) {
	
	if ( 'create_subgroups' == $capability ) {
		// We need to know which group is in question.
		if ( empty( $args['group_id'] ) ) {
			return false;
		}

		// HGBP has already checked the creator setting. We're just checking the depth.
		// Probably want to respect a calculated 'false'; only run if retval is true.
		if ( $retval ) {
			// Whatever our additional logic is goes here.
			// For example, if we only want to allow one level of children, 
			// like: top level (has parent_id = 0) > one level below (non-zero parent_id)
			// we can check if the group's parent_id isn't 0, then return false.
			$group = groups_get_group( $args['group_id'] );

			if ( 0 != $group->parent_id ) {
				$retval = false;
			}
		}

	}

	return $retval;
}