Before 1.61, this kind of nesting was not allowed, because XView doesn't support it, and wxWindows was heavily influenced by XView.
From 1.61, such restrictions are being relaxed a bit for platforms that support more flexibility. Under Motif and Windows, canvases and text subwindows can be placed in panels as well as in frames.
Also, again from 1.61 on, wxPanel is a subclass of wxCanvas, under Windows (only, at present). So drawing in panels is now possible (or placing panel items in a canvas, whichever way you like to look at it). Hopefully this will soon be extended to Motif; it is unlikely to be implemented for XView since XView doesn't really support this way of working.