Based on Google's Pagerank algorithm which the published in 1998, all links are treated equally. This is also called the "Random Surfer" model where value is assigned because the hypothetical person surfing the page randomly clicks on any link.
Google has tweaked this algorithm over the last 20 years. It is now clear that they have moved (at least to some degree) to an "Intentional Surfer" model. That is, they weight links based on how likely they think that a user will be to click on them. Google has never published the details, but they may base their weighting on:
- Whether the link is "above the fold" (visible without scrolling) or how far the user would have to scroll to the link
- How large the link is (font size, amount of text)
- What color the link is (blends in, vs eye catching)
- Whether or not user interaction is required to get to the link (eg, hidden in a menu until mouseover)
I have never heard that Google may base their link weighting on position within a nested HTML list. My guess is that they wouldn't use that as a factor itself. However, your nested list structure may effect how the link is displayed to users in ways that they do account for.
Using large nested menus can be bad for SEO. I'd try to limit the number of links in your menus that are on every page to about 50. We occasionally get questions from people with large menus that have trouble getting their other pages to rank.