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  =end outer

  Z

  =end inner

This latter is improper because when the "=end outer" command is seen, the
currently open region has the formatname "inner", not "outer".  (It just
happens that "outer" is the format name of a higher-up region.)  This is
an error.  Processors must by default report this as an error, and may halt
processing the document containing that error.  A corollary of this is that
regions cannot "overlap" -- i.e., the latter block above does not represent
a region called "outer" which contains X and Y, overlapping a region called
"inner" which contains Y and Z.  But because it is invalid (as all
apparently overlapping regions would be), it doesn't represent that, or
anything at all.

Similarly, this is invalid:

  =begin thing