This course format looks very similar to Topics format except:
sections can be added inside other sections
each section (regardless of its nesting level) can be shown either on the same page as parent or on a separate page. Teacher can change it in edit mode.
If section is displayed on a separate page, it's name is displayed as a link and on this page the link "Back to ... " is displayed
If teacher hides a section all nested sections and activities become hidden as well.
Please note that if section has both activities and subsections activities are displayed first.
On the attached screenshots the section "Quizzes" has tree subsections - "Science" and "Mathematics are displayed on the same page and "Other Uses" on a separate page. Note how course navigation looks like in this case.