Ok, yeah. We don't actually use it that much although I did implement it (using Bobo). Bobo is also dynamic actually, so I'm wondering how they did it if you say that it's not possible dynamically. Perhaps they build some caches in memory.

Anyways. I would expect to configure the cache at field level by specifying a separator, defaulting perhaps to "/".
Storing it in the index would be simply:

California/San Francisco

As we did it, was to store IDs that would be converted back to labels during the query process. Lucene has native grouping functionality that perhaps could be useful in grouping values