AD groups membership not working for target Audience

Hiya,

Got a peculiar problem here. Trying to set audience on a link it doesnt work as we want it to. We have the following behavior:

If adding users directly on SharePoint Group no problems. However if adding AD group to SP group, it doesnt work. Member count for AD Group is 0

AD Group is created as Global, however tried placing it in a Domain Local group to see if that changed anything. SP synchs the AD groups fine, however it seems like it doesnt read the members, thus not granting any users access based on AD group membership.

Not sure if this is default behavior or?