I called Apple: The method described in the user documentation does not work. Apple is aware of the problem. They did give me a workaround:
Apple Wrote:
This is the procedure to make nested home directories.
• Create a user and give the user the home where the nested home will
be.
• Enable the Inspector in Workgroup Manager (WGM)
• In the Inspector, edit 4 attribute properties:
HomeDirectory, NFSHomeDirectory, dsAttrtypeNative:apple-user-
homeurl, and dsAttrTypeNative:homeDirectory.
For each property either chang the the path (i.e. /Network/
Servers/servername/sharename/extrafolder/username) to add the
“extrafolder” in there, or edit the value between the and
path> fields (i.e. extrafolder/username).
• Save a preset for this user
• Create new users with that preset selected in the dropdown at the
bottom of WGM
* If you have existing users to convert, batch edit them and set
their home to “None”, then export the users. Re-import the users and
choose “Overwrite existing record” and the preset you made earlier in
the “Preset for Users:” dropdown in the import window. Everything
else should be default.
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