You can nest competencies and learning objectives by adding a parent-child association between competencies or between learning objectives.
If you have one learning objective that is very broad in scope, dividing it into simpler learning objectives and nesting them beneath it allows users to complete the learning objective in smaller parts. This might also provide a more detailed view of the experiences involved to achieve the overall learning objective.
Nested competencies are ideal if competencies are prerequisites for achieving an overarching competency. For example, if you want to distinguish multiple levels of proficiency, a user might complete a basic level proficiency competency by achieving two learning objectives, then complete an intermediate level proficiency competency by completing two more learning objectives.
If users can view competencies, nested competencies are displayed individually and also within their parent-child associations.