In #409 there was a comment

I'm also operating under the assumption that a block will be "root level" for the foreseeable future - i.e. it will be a direct child of the article.post element that holds the post content.

It appeared that all (block type)HTML elements were becoming blocks. But a lot of HTML elements can be nested, so it follows that blocks could be nested. How could they be previewed correctly if they are not?

Nested lists come to mind immediately. The theme test data contains several nested lists.
An image is a block, right? And can you put it in a paragraph? Even one with a caption.
I was told that the heading hierarchy needed for accessibility could be bypassed by using a figure to hold HTML examples my imagined blogger was writing about.
Blockquotes are for referencing whatever HTML is from an outside source, not just paragraphs.
Tables can have images and paragraphs.
I just wrote issue #427 about being able to put wrapper blocks around other blocks for styling.