Yes, I actually trimmed the nest all the way back to the last frame of moving video (which leaves 5 seconds of freeze-frame inside there). I can see the effect at work in a frame-by-frame sort of way, but trying to play the timeline now only results in an extremely confused Final Cut.
My workaround is similar. Copy a portion of the end of the video, paste in some workspace (any blank piece of timeline you’re not using), add the freeze frame and connect it to the end, export as a quicktime, delete work material, re-import quicktime (it now sees the moving video and the freeze-frame as one item of video, this is the idea I was trying to accomplish with the nest), sync the quicktime with the end of the original video overwriting the original with the quicktime, trim the quicktime back cutting out the freeze-frame, butt the still up against the end of the quicktime, apply page peel transition, and poof! A page peel transition with freeze-frame video half-way through. Seems like more work than should be necessary though.
Nick