The usecase driving fossil
's ability to nest the checkout of one repository into the checkout of another was that we (the Tcl Maintainers) wanted to share the same tclconfig/ across many packages instead of maintaining actual copies per package.
A concrete example of this can be found at Tracking Thread Sources
nested into a checkout of package Thread
Generalized the setup looks like shown below, with the package INNER nested into the checkout of OUTER.
# Start with a regular checkout of a project OUTER
% mkdir outer
% cd outer
% fossil open /path/to/outer.fossil
# Then add the INNER project
# Remember, we are in .../outer here
% mkdir inner
% cd inner
% fossil open --nested /path/to/inner.fossil
# Note the --nested option in the last command. This is necessary to make this work.