This has been identified as a defect in the Group Expansion
Defect IDs 473187,473190 and 473510
The following workaround will make sure the searches show the correct results - you can add all groups that you need to be expanded into a list of groups to be expanded.
Go to Administration - Coordinator and set radio button to "Expand groups that are referenced in existing queries and selected groups". Then add all required groups in the list.
You won't see the user removed from the group in CA right away. Please refer to the "Group Membership Expansion pane" in User guide.
The default interval for the refreshing group membership is 360 mins (6 hours). You can try and set it to minimal value of 10 minutes and restart coordinator (because the change will not be picked up until the task is started/re-started) and see if the change is picked up after 10-15 minutes (watch coordinator log for the following message: Expanding group: Domain.domain/Users/Domain Admins, Members: N)
