The only time I ever nest in the file is if it’s for something like state in a GenServer that will only be used internally by that GenServer.

defmodule SomeGenServer do
  use GenServer

  defmodule State do
    # Note that this is actually SomeGenServer.State
    defstruct [x: "", y: "", z: ""]
  end

  @impl true
  def init(_), do: {:ok, %State{}}

  @impl true
  def handle_call(:x_the_x, _from, state) do
    %{x: x} = state
    x = x_the_x(x)
    {:reply, x, %{state | x: x}}
  end

  def x_the_x(x) do
    to_string(x) <> to_string([Enum.random(?A .. ?z)])
  end
end

Otherwise, I define each module in its own file and have the directory structure match that nesting.

I would say to let each module have its own file. And to follow the directory tree structure.
It makes it easier to find what you need later on.

I’ve done it before, but it doesn’t feel as explicit. It’s kind of magic for magic’s sake. Thinking back to when I first started using Elixir, I would have been very confused by this because they appear as two separate “declarations”. So I would be looking for what State was and ask, “why is it just referring back to the module?” not realizing that the module itself is the struct. On the contrary, defining it as a nested module gives the beginner a clear understanding of where %State{} actually came from.