So would a universe inside of a universe invalidate itself? Or a ledger inside of a ledger? A computer inside of a computer? Genesis inside of Genesis?
Nested systems do not invalidate the boundary that instantiated them; they reveal the rule-set that makes such nesting possible.
What else does a computer do except execute logic across time? What other structure can you demonstrably point to that that preserves truth through time besides Bitcoin that we can both objectively agree upon? There is no second best logic to temporal non-contradiction.
Bitcoin instantiated inside of Bitcoin is not an invalidation of Bitcoin, it’s matter of understanding the rules, logic and perspective of the temporal boundary.
Bitcoin produces lasting truth and logic, but has a continually transforming utxo set. What would Bitcoin inside of Bitcoin looking like Conceptually, this would resemble UTXOs time-locked eternally in the father chain—state preserved under the outer rule-set while a new ordered history unfolds within a new temporal order.