Have you checked to see if the account type is a tech account (under Setup > Techs > Techs > Account Info) and not an admin account? Just ruling out the obvious because I messed around with these settings at first too and wanted to do the same thing as you but I discovered that if the account type is an admin, it can see everything and the permissions don't matter.
Yes. I'm testing with 2 of my help desk staff. I switched their permissions to tech instead of admin. I even created a new tech permissions to play around with the different settings. The only one that worked was limit by tech group. However, it also limited the request types they could access which means I'd have to add them to every single one minus the other department's which would be a pain. It also didn't allow them to see any of the other department groups even though they were members of those groups.
That's unfortunate, but also good to know as I had thought about trying to do this again but it doesn't seem to be worth the pain. I wish there was a better way to achieve this where it wasn't so limiting to other features.
I set this up on our demo environment here: Web Help Desk (it will be there till the end of today, than the DB restores).
See, how is Kim Allen configured.
log in as admin
created new tech permission and checked "limit by department group" and on the other tab assigned tech to this permission level
created new department group and assigned a few departments to it
assigned the new department group to the tech (under setup -> techs)
log out and log in as Kim Allen
verified, that he does not have access to other tickets
Thanks so much for setting this up on a demo server. I didn't get a chance to look at it. I'm hoping it will still be available today.
I'm using this feature successfully with at present 9 different Tech groups (and shortly a tenth). In my setup each Tech Group has it's own set of request types but they can re-categorize a tickets request type to any other request type. Each tech group can only see it's own tickets. The only thing is if someone is an admin - they can see everyone's tickets by using the search tickets - this has been useful in tracking down tickets mistakenly put in to the wrong request type. Hope this helps!