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This is possible, but to do it you'll have to explicitly list each child group as an individual group to include in the filter selection. Also, it probably won't be feasible to do it interactively, since you would have to provide the semi-colon delimited group name string in exactly the sequence it's stored in the database. You can do this with a collection of Group Memberships CONTAINS <groupName> filters wrapped in an "Any of the following" header.
Alternatively, if each member of a child group is also a member of the parent group -- then you could simply query on the parent group. If you're using Group Policy and Client-Side Targeting, this can be done fairly easily by including the parent group along with the child group in a semi-colon delimited list in the text box in the Enable client-side targeting policy setting (e.g. Child Group A; Parent Computer Group). If you're using Server-Side Targeting, you can use the Change Group Membership action in the Patch Manager console to add those child group members to the parent group.
Thanks L Garvin.
I didn't realize that a client could belong to multiple WSUS Computer Groups! So I went with the Group Policy Client Side Targeting approach as that seemed easier to maintain in the long run.