Hi
It is a product limitation. You can't insert a sub report within a sub report.
In your second report there is a sub report, when you insert this in first repot the second report sub report becomes sub report within a sub report.
That is the reason you are unable to see the sub report in second report.
Try to insert the second report sub report also in your first report as sub report.
(I am not sure whether the business requirement can be fulfilled through this)