This is a design suggestion not a bug. I've found it frustrating to restructure my muscle memory when using nested prefabs. I feel that I'm a lot slower in my productivity.

When I attempt to add, edit or restructure a prefab, a pop up appears.

"You need to be in Prefab mode to edit"... fair enough...

This will also happen if you attempt to drag and drop into a prefab (But not when dragging a game object out of a prefab)

My gripe is that I need to click accept, then select the parent prefab, right click and select "Open Prefab". Then preform my edit etc. This is very slow and my muscle memory has me seeing this pop up a lot. It would save a lot of time, if the pop up had the option to open the selected game object in "Prefab Mode"

Users will run into this a lot before their muscle memory changes.

It would be worth removing the ability to drag and drop in this instance. Usually you'd see an "X" or a "Cross Out" icon when trying to drop into a menu. We have forgotten to add it for nested prefabs.

Many thanks.