This can be handy if you want one of your environment variables to default to the value of another variable which has its own default.

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Nested variable interpolation in Docker Compose v2 allows one environment variable to default to another variable's value, similar to shell behavior. This feature can simplify managing environment variables, although some caution is needed to avoid redundant default values.

Docker Tip #98: Nested Variable Interpolation with Docker Compose v2