Hey Pauline. From what the docs say: a reply cannot also be a quote. Quoting always makes a new top-level commit with an embedded card, so there is no reply-with-quote.
For the "why", the team explained on the day two livestream that plain reposts were unnecessary because…
You can, yeah. Quoting works on any commit, replies included, it just creates a new top-level commit instead of a nested one.
The limit is the reverse: you cannot make a reply that is also a quote. So my reply can be quoted, it just can't be a quote-reply.