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I have searched on this issue for about 2 days now and I can’t find a way to resolve it.

I have an OU (outside of the Users OU) with a single User Group in it called “Administration Group”. I also have a single user that is a member of that group that is located in the User OU. I have created a User GPO that adds a network location to the “My Network Places”. However, this GPO does not get applied at all unless I move the User into the specific OU. Shouldn’t it get applied to the User Group as well if the group is in the OU?

2 Spice ups
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Negative. It’s a GPO for users, not groups, it will only apply to users in the OU you apply it to.

You can apply a GPO to users in an OU, that are only in a group, but you can’t apply a policy to a group directly.

FYI, the default ‘users’ is not an OU, it’s a container, GPOs do not apply to this either.

6 Spice ups
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You are mixing OUs and Security groups.
OUs are a tree structure - they can hold lots of things including user accounts and security groups.
If you apply a user GPO to an OU - it will apply to users in that OU.
GPOs can have additional settings such as filtering to a security group or item level targeting a security group - this is used in conjunction to the OU linking. User still needs to be in an OU where GPO is linked for it to apply - then optionally filter on security group.

Where have you linked the GPO?
If you linked it to the ‘new’ OU (outside of Users OU) then it will only apply to users in that OU - the security group being there is not relevant.

I think you want a GPO that applies to users in a specific group - to do this create the GPO and link it to the default Users OU. Within the GPO itself use item level targeting to apply to a security group (preferred option) or filter to the security group.

Usually security groups are all in one OU (named security groups).

1 Spice up
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Thank you both for the clarification, IDK where I got that a GPO could be applied to a group.