When text replacement is already active because a parent COPY statement uses the REPLACING phrase, any text replacement specified in a nested COPY statement that uses the REPLACING phrase terminates (or overrides) all copy text replacement specified in the parent COPY statement.
When the copybook copied by the nested COPY statement reaches end-of-file, the COPY text replacement will not be active for any additional source text read by the Compiler. This does not apply to a REPLACE statement text replacement.
