How to add Parent and Child to a Views 3 table format using Groupping Field?
Starting from scratch with a dummy content type that contains just a title and a taxonomy term. 

1) Create the simple taxonomy: Category_hierarchy {i.e. 1, 1.1, 1.2, 2, 3, 3.1};

2) Create the simple content type. {title, taxonomy [Category_hierarchy];

3) Create the view:


  Format: Table
   + Settings
  - Grouping field Nr.1: Category_hierarchy
  
  Fields
  + Content: Title
  + Content: Category_hierarchy
      -- Exclude from display.
  
  Sort criteria
  + Content: Title (asc)
  
  Relationships
  + Content: Taxonomy terms on node [1]
      -- Vocabulary: Category_hierarchy
      -- [custom] Identifier: Category_hierarchy_child  


[1] This is the only taxonomy-type Relationship available.

Results show the node titles grouped by the child relationship as expected.

4) Revisiting the View now that we see what we can simply construct, we try to get the parent term added to the display. Now, under the Relationships section is a whole new list of options titled "Taxonomy term". So we add one more to get the missing relationship, parent.


  Relationships
  + Taxonomy term: Parent term
      -- Relationship: Category_hierarchy_child
      -- [custom] Identifier: Category_hierarchy_parent  


If we peek into Table's settings, we would hope this might make the new relationship an available option under Grouping field Nr.1. But the grouping field options are still only Category_hierarchy and Title. 

Just to be sure I added Grouping filed Nr.2 with Category_hierarchy to see if Views can do something magical and sort out the relationships automatically. 

Nope. But it was worth a try. Its clear there must be some other way to populate that menu. Maybe Views has made some kind of magical field we can add from under Fields? 

And that's just what has happened. We now have a new type of available field, 'Taxonomy term':

Taxonomy term: Name
 - The taxonomy term name.
Taxonomy term: Rendered Taxonomy term
 - The Taxonomy term of the current relationship rendered using a view mode.
Taxonomy term: Term description
 - The description associated with a taxonomy term.
Taxonomy term: Term edit link
 - Provide a simple link to edit the term.
Taxonomy term: Term ID
 - The tid of a taxonomy term.
Taxonomy term: Weight
 - The term weight field
Taxonomy vocabulary: Description
 -The taxonomy vocabulary description
Taxonomy vocabulary: Machine name
 - Machine-Name of the vocabulary a term is a member of. This will be the vocabulary that whichever term the "Taxonomy: Term" field is; and can similarly cause duplicates.
Taxonomy vocabulary: Name
 - Name of the vocabulary a term is a member of. This will be the vocabulary that whichever term the "Taxonomy: Term" field is; and can similarly cause duplicates.
Taxonomy vocabulary: Vocabulary ID
 - The taxonomy vocabulary ID  

I've crossed out the unlikely candidates. And added each, in turn, to the Field section and looked for the field in Table's settings. Good gravy. They both worked!

I certainly don't expect tutorial answers. But I was already writing up a bug report for another problem I encountered so, my bug is your gain.