Simply put... The TIMECODE effect should simply read the timecode of the clip, NO MATTER what BUT the TIMECODE effect refuses to read the timecode of any nest.
For instance... if I make a nest of a clip, I always alter the timecode to match the clip inside. If I use that nest in a cut, when I add the TIMECODE effect to that nest, I expect the TIMECODE effect to be able to read the timecode of the nest. Instead it simply ignores it. If I match frame, its clear the timecode is there, but the TIMECODE effect has no idea what to do with it.