You've got to "connect the dots" to get it to work. It might seem a bit obtuse but you have to "do the work over" in the host family to be able to flex or fill out a parameter in the nested "child" family. The image below shows a nested Type Parameter getting connected to the host's version.
It isn't necessary to name the parameters exactly the same but it might help keep things straight.
I created a brief VIDEO that points out where this happens plus a little bonus tip on replacing nested content. Don't load the new family, replace and remove the old family...just reload the existing one from the new different version instead. That way you won't forget to remove the unused nested family.