In order to delete components inside of a nest as you have in your example, you need to be working in the same context as the component. So in your case you need to open the high level component for editing. Accessing them via the Outliner would be another option which amounts to the same thing.
You don’t see the biscuit in the Components window because you have it set to only show the highest level components. You need to expand the display to show the lower level components.
Maybe you’ve got more nesting going on that you need or maybe you need to wait until later in the process to begin nesting components.