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Renaming a group in the Local variables window replaced every slash in the typed name with a hyphen, so "Palette/Orange" gave a flat Palette-Orange group and there was no way to move a group under a new parent. The typed path now replaces the group's last part, so a slash nests the group as in Figma: Orange/100 becomes Palette/Orange/100 and the sidebar shows Orange under Palette. Each part is trimmed and empty parts are dropped; a name that comes out empty or unchanged does nothing. The renames go deepest name first, so a group moved into its own new subgroup (Orange to Orange/Warm) never collides with a variable that is still to move. A rename onto a variable name that stays is refused by variable.update and the batch rolls back; it stays one undo step.