A nice fellow on ubuntuforums found the culprit.

Remove --manage-gids in /etc/default/nfs-kernel-server

I guess this problem will just surface more and more as people replace
the older Ubuntu server with newer systems. So I would look out for this
bug, maybe fix it before you get a ton of broken systems... :-)

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Secondary groups not working with NFS
https://bugs.launchpad.net/bugs/409366
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