Sometimes the hierarchy of items doesn't display properly when using group by. I have attached a file to demonstrate the issue.

In the file, click on the MyJournal grid. (This grid is set to group by ItemCreated.) Click Refresh. Expand all items in the grid. On my system, the result looks like this: 

The circled item is actually a sub-item of the previous item, but for some reason it isn't indented.

Now, on my system, if I simply open Tools | Options and then click Okay (without changing any of the options), the hierarchy display spontaneously changes, as follows: 

It now looks as I would expect it to look, with the circled item indented. But if I click refresh again, it goes back to the previous state.