JIRA is only really aware of the groups in AD. If you want to pull out an attribute then you'll need some code to do it, and it won't be a group in JIRA unless you start doing things like making dummy groups for attributes or rewriting the user handling inside the application.
A better solution here would be to forget the department field and make a set of department groups in AD.
Also, as for nesting, it can understand the nesting, but it "flattens" it within the application. As an example, if AD has a group called Birds, and a nested group called Penguins, the JIRA will see two groups. It won't show you that Penguins is part of Birds, they're just two groups. If you put Mr Flibble (a user) into Penguins, then, because the group is nested, he's automatically part of Birds too, and JIRA will show him as a member of Birds and Penguins. It will also show the nesting to administrators if they are messing with user setups (e.g. they can't remove him from Birds directly, because he's only there because he's a Penguin), but not anywhere in the UI.
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