Matrioska effect
As far as I remember the most you’ll get is 2 ‘layers’ – for example a champion bag with a bag of materials inside it.
There’s 2 reasons for it:
1) Increasing the amount of drops you can get without filling up your inventory when you don’t have time to clear it. Instead of getting 3 items from a champion you’ll get a champion bag with 3 items inside it (disclaimer: I don’t actually know how many items drop from champ bags, I think it varies). That means you can collect 3 times as many drops before your inventory is full. In practice it’s even more because you’ll probably get several of the same type of bag and they stack. And then you can wait until it’s convenient for you to deal with the contents before you open the bags, instead of having to stop in the middle of something because your inventory is full.
2) It simplifies loot tables for Anet which makes drops easier to monitor. For example instead of having 8 kinds of crafting materials in an enemy’s loot table they can have 1 crafting material bag, and then a separate loot table for that bag with the 8 materials in it. This won’t directly affect us, but it makes a big difference to how things are done behind the scenes. For example making it easier to update loot tables because they just edit the 1 bag instead of 10+ enemies that drop it.
“Life’s a journey, not a destination.”