This is because the nested event instruments are on the game parameter (“Hour”). The instruments are triggered when the parameter’s playback cursor is over them. In your case, if the parameter value is set between 5-7, what will happen is you will get both Nested Event and Nested Event (2) playing at the same time, but with reduced volume on both (volume depending on what part of the fade curves the playback cursor is on).
In order to get a crossfading to work, you will need to add AHDSR to each event instrument’s volume.
You will need to zoom into the timeline and adjust the “shared” value points (ie. at hours 7 and 18) in order to add a tiny gap by trimming one of the instruments by 0.01. This is in order for the cross fading to work correctly with AHDSR due to the way FMOD triggers instruments. Otherwise, at these shared points both instruments will play at the same time.