To clarify: without being able to simulate the universe from within the universe itself (i.e. needing to resort to some "outside" higher-fidelity universe), then the word "simulation" becomes meaningless.
We could just as easily refer to the whole thing (the inner "simulation" and the outer "simulation") as just being different "layers of abstraction" of the same universe, and drop the word "simulation" altogether. It would have the same ontology with less baggage.