A more comprehensive description of how the MetadataHandler works?

I ran into some problems with the entity and field definitions, as I don't fully understand the recursive nature of `list_entities`. It says that setting `has_nested_entities` to True will make it recursive, but in what way exactly? Is `list_entities` called again but with a child of the main object? If so, how does it know to get a child depending on the object structure? Otherwise, what is called recursively?

The way I see it, it could be a list containing multiple dictionaries, or a dictionary containing dictionaries and lists, etc.
The structure I want to get defined is a list of dictionaries, each of which have the same keys. So I was thinking that I'd have one entity (the list), with children entities (the dictionaries), that each contain fields. How does one differentiate when to define an entity with children in this case, and when not to?