Comment 1 for bug 1547435

I think you can get around this issue by adding explicit dependency 'depends-on' to 'instances' or use the subnet with the server networks property.

ex.

instances:
    type: OS::Heat::ResourceGroup
    depends_on: subnet

or

          networks:
             - subnet: { get_resource: subnet }

There is check for the OS::Nova::Server to check for subnets[1] in the same stack. However, it does not work with ResourceGroup as it's nested stack and the subnet is in the parent/root stack.

However, the template you used results in a non deletable stack which is worrying.

[1] https://github.com/openstack/heat/blob/master/heat/engine/resources/openstack/nova/server.py#L987-L998