I think I can actually answer this on my own, now that I've done some more digging:
Technically you can create a managed path for say /sites/, then if you wanted to create managed paths under that you could do /sites/portals or /sites/teams and bury collections under each of those paths along with also burying collections under /sites/.
You cannot, however, create a site collection in this example under /sites/ called "Portals", because once you create the managed path /sites/portals/ it is marked as reserved.