Right now we don't support mods nested inside elements, but instead prefer the syntax @include Elem(myelem, mymod), but this is overly restrictive. One issue is that it puts pressure on authors to break out elements into top-level blocks, since the syntax is cleaner - especially if the element has a few modifiers, or has modifiers you want to include programmatically (ie. in a @each ... or similar)
We should support @include Elem(myelem) { @include Mod(mymod) { ... }} syntax for element-modifiers.