"The horse raced past the barn fell" is embedded just one level deep. Besides it becoming completely unintelligible, there's nothing to say that you can't nest

"The horse raced past the barn fell" is embedded just one level deep. Besides it becoming completely unintelligible, there's nothing to say that you can't nest arbitrarily: The dog the cat the mouse liked hated barked. Of course, language isn't prescriptive, so it's arguable if this is allowed. It's grammatical, in a technical sense, but not acceptable to, I'd imagine, most English speakers.