Use correct controller name, namespacing ignored.

app/views/layouts/nav/_group.html.haml

@@ -2,7 +2,7 @@
   = nav_link(path: 'groups#show', html_options: {class: 'home'}) do
     = link_to group_path(@group), title: "Home" do
       Activity
-  = nav_link(path: 'groups#milestones') do
+  = nav_link(path: 'milestones#index') do
     = link_to group_milestones_path(@group) do
       Milestones
   = nav_link(path: 'groups#issues') do