Grant Fritchey dives into the problem with nested views:
That’s a query against the XML stored in the ProductModel table. The view was created to mask the complexity of the necessary XPath code, while providing a mechanism for retrieving the data from the XML. This is a common use of views. However, when we then treat the view as a table, and join it to other tables and views, we present a problem for the optimizer. Because a view is not a table, but is instead a query, the optimizer has to resolve this query in combination with any other views or tables to arrive at an execution plan for the whole combined mess. While the optimizer is very good at what it does, because of the complexity caused by the additional unnecessary processing to figure out which parts of the view is not needed to satisfy the query, it can make poor choices. That can result in poor performance.
“Poor performance” can be an understatement.