What does it mean that everything can be nested?

Any concept can contain sub-concepts and belong to a super-concept. Nesting is not a feature of special data structures -- it is a universal property of how meaning organizes itself at every scale.

Example: Take the concept 'communication.' It contains sub-concepts: verbal communication, nonverbal communication, written communication. Verbal communication itself contains sub-concepts: tone, word choice, pacing. Meanwhile, 'communication' belongs to a super-concept: 'human interaction,' which belongs to 'social behavior,' which belongs to 'adaptive systems.' You can zoom in or out at any point, and at every level you find the same structural pattern -- things inside things inside things.

Try this: Pick any concept you work with regularly -- a skill, a project, a domain of knowledge. Write it in the center of a page. Above it, write two super-concepts it belongs to (the larger wholes it is part of). Below it, write three sub-concepts it contains (the smaller parts that compose it). Then pick one of those sub-concepts and repeat: two levels up, three levels down. You will find that the nesting does not stop. Every concept you touch has both interiority (things inside it) and context (things it is inside of). Map at least three levels in each direction.