Recreate ancestor milestones when moving projects

This fixes a bug where only direct parent group
milestones were checked

app/services/milestones/transfer_service.rb

@@ -46,7 +46,7 @@ module Milestones
       Milestone.joins(:issues)
         .where(
           issues: { project_id: project.id },
-          group_id: old_group.id
+          group_id: old_group.self_and_ancestors
         )
     end
     # rubocop: enable CodeReuse/ActiveRecord
@@ -56,7 +56,7 @@ module Milestones
       Milestone.joins(:merge_requests)
         .where(
           merge_requests: { target_project_id: project.id },
-          group_id: old_group.id
+          group_id: old_group.self_and_ancestors
         )
     end
     # rubocop: enable CodeReuse/ActiveRecord

changelogs/unreleased/fix-invalid-milestones-when-moving-projects.yml

+---
+title: Fix invalid ancestor group milestones when moving projects
+merge_request: 27262
+author:
+type: fixed

spec/services/milestones/transfer_service_spec.rb

@@ -40,6 +40,16 @@ describe Milestones::TransferService do
           expect(new_milestone.project_milestone?).to be_truthy
         end
 
+        context 'when milestone is from an ancestor group' do
+          let(:old_group_ancestor) { create(:group) }
+          let(:old_group) { create(:group, parent: old_group_ancestor) }
+          let(:group_milestone) { create(:milestone, group: old_group_ancestor)}
+
+          it 'recreates the missing group milestones at project level' do
+            expect { service.execute }.to change(project.milestones, :count).by(1)
+          end
+        end
+
         it 'deletes milestone issue counters cache for both milestones' do
           new_milestone = create(:milestone, project: project, title: group_milestone.title)