Steps to Reproduce:
1. Ensure that the "Media Selection" option is set to "All Media" in one of the existing Host Groups.
2. Click the "Nest" button to create a child Host Group from the selected parent Host Group, then open the "Operating System" tab.
3. You will notice that the "Media Selection" option has switched from "All Media" to "Synced Content."

Additionally, the "Synced Content" option will display the value "Inherit parent (no value)."

Expectation:
If a nested host group is created, and this nested host group has the selection at "All media" it stays at "All media" for the nested HG.

Interesting: this happens with "nest" but can not reproduced if "clone" is used.