When there are two or more nested Grade Limits, all of them take effect. But note that if there are two or more intersecting (partially overlapping) Grade Limits, they will be perceived as a single Grade Limit when applying the modification.
According to the concept the existing model presents the untreated site surface before modifications. However, one may want to have a modified existing surface so it is possible to have modifiers that work on the existing model. Note that when a modifier is set to modify the existing, it will modify the proposed as well. So if there is a Grade Limit set to existing, it will also affect the proposed model.
Currently the contour edits are intended to work only outside the modifiers (such as a Grade Limit). Hopefully, the next 2019 version will allow editing the contour parts that fall within a Grade Limit.
In other words, the modifiers (being external definitions of how to modify the TIN) will override the contour edits.
A Grade Limit alone doesn't affect/change the TIN geometry but it still introduces new point and segments in the TIN which can be useful in some cases. So if first a contour is edited and after that a Grade Limit is created over it, it won't override the contour edit. However, if inside this Grade Limit are created one or more Pads (no matter whether they are created over the edited contour or not), the contour edit will be overridden. The reason is that when there is a Grade Limit around a Pad, the TIN area between them will be interpolated/smoothed (to get a smooth transition between the pad modification and the rest of the TIN, where the extent of the smooth transition is specified by the Grade Limit).