This looks like recursion to me.

sub devices_for {
    my ( $thing ) = @_;
    my @subs = query( $thing );
    return map { /^DEVICE\d+/ ? $_ : devices_for( $_ ) } @subs;
}
[download]

The first call, devices_for( 'GROUP1' ), causes a query( 'GROUP1' ). The map sends the device entries right through but causes a recursive call for 'GROUP2' and so forth. What the initial call for 'GROUP1' returns just a list of devices. Slip in a sort if you need them in order.

Update: Slightly better:

sub devices_for {
    my ( $thing ) = @_;
    return $thing if $thing =~ /^DEVICE\d/;
    return map { devices_for( $_ ) } query( $thing );
}
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Or all in "one step":

sub devices_for {
    return ( $_[0] =~ /^DEVICE\d/ )
        ? $_[0]
        : map { devices_for( $_ ) } query( $_[0] );
}
[download]