$ cat ./hosts
[group1]
localhost

[group1:children]
group2

[group2]
# is empty

$ cat group_vars/group1
---
xxx: 1
yyy: 1

$ cat group_vars/group2
---
xxx: 2

$ cat site.yaml
---
- hosts: all
  gather_facts: no
  connection: local
  tasks:
    - debug:
        msg: "xxx: {{ xxx }}; yyy: {{ yyy }}"
        # Expecting to print out: "xxx: 2; yyy: 1"
        # Instead this is printed out: "xxx: 1; yyy: 1"