I don't know, if both these styles of using nested lists in HTML are conforming to spec, however both styles are common.

This style is used for example in mails generated by Thunderbird and does not render correctly in pandoc:

<!-- file: nested-list1.html -->
<ul>
	<li>L1</li>
	<li>L2</li>
	<ul>
		<li>L3.1</li>
		<li>L3.2</li>
	</ul>
</ul>

~$ cat nested-list1.html | pandoc -f html -t markdown
L1

L2

-   L3.1
-   L3.2

This style works well with pandoc:

<!-- file: nested-list2.html -->
<ul>
	<li>L1</li>
	<li>L2
	<ul>
		<li>L3.1</li>
		<li>L3.2</li>
	</ul></li>
</ul>

$ cat nested-list2.html | pandoc -f html -t markdown
-   L1
-   L2
    -   L3.1
    -   L3.2

It would be nice, if pandoc could render both styles as intended. (The expectation would be, to have both styles render the same in markdown output and other writers.)