After finishing The X Files last week, I'm back to TNG trying to finish Season 6 on blu ray. Watched Ship in a Bottle and Aquiel last night. The first episode is as great as always, even though I'm always a little confused by the end. So they put Moriarity in a holodeck of a holodeck or was it just one holodeck?
That's what I love about that episode. Moriarty believe's he is in the real world, but he's actually just in a simulation (no nesting at this point).
I'd argue he's not even in a holodeck. It's a completely virtual simulation, since Moriarty, the Countess and their environments are all virtual to begin with, so there's no need for any actual physical simulations.
It was a very TNG solution. In other series, they probably would have told Moriarty to F off and shut down the holodeck. Here, they came to a compromise and Picard did fulfill his promise. Everyone was happy in the end.