does EJB 2.0 spec. make is mandatory to support nested transactions ?
Which application server vendors are supporting this in the recent releases?
No, EJB2.0 does not introduce the concept of nested transactions. Nor does JTA and JTS adopt the nested transaction model.
Yes, EJB uses flat transactions but I think it is incorrect to say JTA and JTS does not adopt the nested transaction model. From a brief look at the specs. it seems like nested transaction support is not supported but that does not me they don't adopt it. Not an expert, but would find it hard to believe that JTA would not allow for nested transaction since this would be a very limiting spec.