Hide "New subgroup" links when subgroups are not supported

app/views/groups/show.html.haml

 - @no_container = true
 - breadcrumb_title "Details"
+- can_create_subgroups = can?(current_user, :create_subgroup, @group)
 
 = content_for :meta_tags do
   = auto_discovery_link_tag(:atom, group_url(@group, rss_url_options), title: "#{@group.name} activity")
@@ -16,8 +17,9 @@
         - new_subgroup_label = _("New subgroup")
         .btn-group.new-project-subgroup.droplab-dropdown.js-new-project-subgroup{ data: { project_path: new_project_path(namespace_id: @group.id), subgroup_path: new_group_path(parent_id: @group.id) } }
           %input.btn.btn-success.dropdown-primary.js-new-group-child{ type: "button", value: new_project_label, data: { action: "new-project" } }
-          %button.btn.btn-success.dropdown-toggle.js-dropdown-toggle{ type: "button", data: { "dropdown-trigger" => "#new-project-or-subgroup-dropdown" } }
-            = icon("caret-down", class: "dropdown-btn-icon")
+          - if can_create_subgroups
+            %button.btn.btn-success.dropdown-toggle.js-dropdown-toggle{ type: "button", data: { "dropdown-trigger" => "#new-project-or-subgroup-dropdown" } }
+              = icon("caret-down", class: "dropdown-btn-icon")
           %ul#new-project-or-subgroup-dropdown.dropdown-menu.dropdown-menu-align-right{ data: { dropdown: true } }
             %li.droplab-item-selected{ role: "button", data: { value: "new-project", text: new_project_label } }
               .menu-item
@@ -26,14 +28,15 @@
                 .description
                   %strong= new_project_label
                   %span= s_("GroupsTree|Create project under this group.")
-            %li.divider.droplap-item-ignore
-            %li{ role: "button", data: { value: "new-subgroup", text: new_subgroup_label } }
-              .menu-item
-                .icon-container
-                  = icon("check", class: "list-item-checkmark")
-                .description
-                  %strong= new_subgroup_label
-                  %span= s_("GroupsTree|Create a subgroup under this group.")
+            - if can_create_subgroups
+              %li.divider.droplap-item-ignore
+              %li{ role: "button", data: { value: "new-subgroup", text: new_subgroup_label } }
+                .menu-item
+                  .icon-container
+                    = icon("check", class: "list-item-checkmark")
+                  .description
+                    %strong= new_subgroup_label
+                    %span= s_("GroupsTree|Create a subgroup under this group.")
 
   - if params[:filter].blank? && @children.empty?
     = render "shared/groups/empty_state"

spec/features/groups/show_spec.rb

@@ -24,4 +24,34 @@ feature 'Group show page' do
 
     it_behaves_like "an autodiscoverable RSS feed without an RSS token"
   end
+
+  context 'subgroup support' do
+    let(:user) { create(:user) }
+
+    before do
+      group.add_owner(user)
+      sign_in(user)
+    end
+    context 'when subgroups are supported', :js do
+      before do
+        allow(Group).to receive(:supports_nested_groups?) { true }
+        visit path
+      end
+
+      it 'allows creating subgroups' do
+        expect(page).to have_css("li[data-text='New subgroup']", visible: false)
+      end
+    end
+
+    context 'when subgroups are not supported' do
+      before do
+        allow(Group).to receive(:supports_nested_groups?) { false }
+        visit path
+      end
+
+      it 'allows creating subgroups' do
+        expect(page).not_to have_selector("li[data-text='New subgroup']", visible: false)
+      end
+    end
+  end
 end