Have can I have a view grouped by nested hierarchy?
Create a list of all nodes that you want in your Views, 
add the field for their taxonomy terms to show where they belong, 
add the Parent relatinship for your taxonomy reference field to your Views. You may need to first add the relationship to the taxonomy reference field first, to get the Parent one to show as an option, in which case you'll en up with two relationships, the second one set to use the first one. 
Add the Taxonomy Name field and set it to use the Parent Relationship. This field will show the parent term of the one the node is tagged with 
Under Format use the "Group by field" option and set the first one to the Parent Field, and the second "Group by field" to the (sub-term) regular taxonomy field. 


This should get you fairly close, I can't predict OTOMH where the nodes that have been tagged with only the parent taxonomy.