the Windows Root OS takes full control of virtualization extensions (observe the arrows), and expose them to the guest OS.

nested virtualization. Hyper-V has been configured to expose virtualization extensions to its guest VM. A guest VM can take advantage of this, and install its own hypervisor. It can then run its own guest VMs.

nested virtualization. It is necessary to use the following PowerShell command to make it work properly: Set-VMProcessor -VMName <VMName> -ExposeVirtualizationExtensions $false

that is possible to use other virtualization applications like WMware in Hyper-V virtual machines, and nested virtualization will succeed.

once Hyper-V is installed, the hypervisor hides this capability from guest virtual machines, preventing guests virtual machines from installing Hyper-V. So, nested virtualization is not possible.