Yes, nested virtualization has existed for a long time... on Intel. On Windows, it is not supported on ARM. For a long time it wasn't even supported on AMD! They added AMD nested virtualization support in Windows Server 2022!
Note that when the Windows host is invisibly running under Hyper-V, your other Hyper-V VMs are its "siblings" and not nested children. You're not using nested virtualization in that situation. It's only when running a Hyper-V VM inside another Hyper-V VM. WSL2 is a Hyper-V VM, so if you want to run WSL2 inside a Windows Hyper-V VM which is inside your Windows host, it ends up needing to nest.
Note that when the Windows host is invisibly running under Hyper-V, your other Hyper-V VMs are its "siblings" and not nested children. You're not using nested virtualization in that situation. It's only when running a Hyper-V VM inside another Hyper-V VM. WSL2 is a Hyper-V VM, so if you want to run WSL2 inside a Windows Hyper-V VM which is inside your Windows host, it ends up needing to nest.