It should be the same whether or not it's nested. The "Lister Context Menu" item in the default menus runs this command:
FileType CONTEXTMENU=Directory\Background
That pulls in the Windows folder background menu, so it'll be hidden by default if you've turned on Hide Windows items on file context menus (shift overrides), unless shift is held down.
But you can add CONTEXTFORCE to the command to force it to appear even when that option is on.
See Crash, exit or high CPU when right-clicking certain files for how to track down the problem extension(s).