Nested layouts in Next.js work by wrapping page components inside multiple layout components. The app starts rendering from the RootLayout, which wraps nested layouts like DashboardLayout or ProfileLayout. Each layout receives its inner content as the 'children' prop and renders it inside its JSX. When the user navigates, Next.js reuses layouts if possible or renders new nested layouts for different routes. This keeps the page structure consistent and allows UI parts like headers or sidebars to stay visible while only the page content changes. The execution table shows step-by-step how layouts and pages render and update during navigation, tracking the 'children' prop and current page content. Key moments clarify why RootLayout renders once, how children pass through layouts, and what happens when switching nested layouts. The visual quiz tests understanding of these steps and props. Overall, nested layouts help organize and reuse UI in Next.js apps efficiently.