Homegroup does only work over one subnet, but it also requires the underlying network infrastructure to be setup correctly. If homegroup did sit above the network layer and was able to communicate it would possibly be a fudge too far as it's likely other value added services (like local Plex) wouldn't work.
To be fair I think most people would be against manual setup of every device on their home network? Apart from having to configure anyone's phone that wants to use my WiFi a quick google shows many IOT things can't be assigned static IP addresses and would mean devices that need DHCP, like my Echo Dot, would stop working.
Keeping things on the same subnet with different ranges is something I had considered when brainstorming this.
I'll actually get a chance to test this tonight as I'm getting a spare BTHH off a friend today.
I'm planning on setting up my ASUS "ROUTER1" DHCP range 192.168.1.2-120 with a subnet mask for 255.255.255.0.
Then BTHH "ROUTER2" DHCP range of 192.168.1.121-254 with the same subnet mask.
In turn I hope that the broadcasting used by the router will be sent out on all ports when it picks up IP address it doesn't recognized as directly attached but within it's DHCP subnet range.
Sorry, I should also say I don't have any double NATing issues at the moment. I've copied and pasted the details from the Asus router to the Sky modem in the diagram. DHCP is disabled on the modem. Sky Hub IP is 192.168.0.1 and the Asus router WAP IP is 192.168.0.250.
