Having some difficulty understanding what you're after, so here's my best guess.

BEGIN TRAN

CREATE TABLE [dbo].[groupsAssociation](

[Id] [int] IDENTITY(1,1) NOT NULL,

[GroupId] [int] NOT NULL,

[GroupName] [varchar](250) NULL,

[ParentGroupId] [bigint] NULL,

[ParentGroupName] [varchar](250) NULL

) ON [PRIMARY]

--Fixed sample data -> you missed "UNION ALL"

INSERT INTO [dbo].[groupsAssociation]

([GroupId]

,[GroupName]

,[ParentGroupId]

,[ParentGroupName])

SELECT 269, 'B1', 271, 'B' UNION ALL

SELECT 270, 'B2', 271, 'B' UNION ALL

SELECT 269, 'B1', 272, 'A' UNION ALL

SELECT 272, 'A', 271, 'B' UNION ALL

SELECT 271, 'B', 272, 'A' UNION ALL

SELECT 273, 'C', NULL, NULL UNION ALL

SELECT 274, 'D', NULL, NULL

--Actual query

SELECT GroupId, Groups

FROM (SELECT GroupId,

GroupName + ISNULL(',' + STUFF((SELECT ',' + GroupName

FROM (SELECT children.GroupName, nodes.Id

FROM [groupsAssociation] nodes

--Get child ID

OUTER APPLY (SELECT [ParentGroupId], [GroupId] AS childid, [GroupName]

FROM [groupsAssociation] st

WHERE nodes.[GroupId] = st.[ParentGroupId]) children) t2

WHERE t2.Id = t1.Id

FOR XML PATH('')), 1, 1, ''),'') AS Groups

FROM [groupsAssociation] t1) a

GROUP BY GroupId, Groups

ROLLBACK

This returns: -

GroupId Groups

----------- -----------------

269 B1

270 B2

271 B,B1,B2,A

272 A,B1,B

273 C

274 D