Create new nesting layer when dropped

[myregistration]

How can I add a new nested layer below an existing layer when element dropped on it? Currently it will just align the layers so the element becomes a sibling. I want to create a new nested layer of children including the dropped element. I can't find an example anywhere. I've tried to illustrate it below. Thanks!

Current:
Element 1
-- Element 1.1
-- Element 1.2 (dropped on element 1.1)

Desired:
Element 1
-- Element 1.1
---- Element 1.1.1 (dropped on element 1.1)