Sadly, Canvas can't handle nested groups yet. So there is no option for you to split larger groups into smaller ones or vice versa. What you can do is use one of the following workarounds, but they have some drawbacks.

Manual merge: Requires a lot of manual drag and drop.
Self sign-up: You don't have full control of students chosen groups and it might require some manual editing or verification afterwards.

For the purpose of these examples: let's say you want students to work in groups of 2 with a practical assignment (small groups) and then attend a seminar discussion their work (large groups). Seminar group 1 should consist of Lab group 1, 2 and 3. (this test course only contains 10 test students)

Manual merge

Since there is an option to clone a group set you could go ahead and first create the smaller Lab groups (either manually or through self sign-up).

The smaller lab groups.

Then clone this group set and name it Seminar group.

Clone the smaller group set.

Within the new group set (that still has the old individual group names) you manually merge Lab group 1, 2 and 3 into Lab group 1 using drag and drop. Lab group 1 should then have 6 students while 2 and 3 should have no students.

Drag and drop students into a larger group.

After merging students into a larger group you rename it and remove the empty groups.

Rename and remove after merging groups.

Repeat the process for all the other groups.

Self sign-up

By defining your groups in another program (e.g. Excel), upload the file, create a lot of empty groups and allow self sign-up you could accomplish something like larger groups consisting of students from a specific set of smaller groups. However, there is no guarantee that every student picks the right groups or doesn't swap with someone.

First, define your groups in Excel or whatever spreadsheet you prefer.

Define groups in Excel.

Tip!

If you are using Excel it is a good idea to format your data as a table since students then can search and filter much easier with the drop down arrows in the table headers.

Format your data as a table.

To do this select all your data cells, go to Home, click Format as Table and check My table has headers.

Upload your spreadsheet and make it accessible for students either with Files or Modules. Create your empty groups for both group sets (don't forget to limit the number of students).

Small self sign-up groups.

Large self sign-up groups.

Then inform students to join the groups they have been assigned in the spreadsheet. Making an Announcement should work well for this.