How should we handle sub elements within an existing element? Should it be converted into a block?

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example.html

<!-- we could keep `block__element-3` as a sub element... -->
<div class="block">
    <div class="block__element-1">
        <div class="block__element-3"></div>
    </div>
    <div class="block__element-2"></div>
</div>

<!-- or we could convert `block__element-3` into a new block... -->
<div class="block">
    <div class="block__element-1">
        <div class="new-block"></div>
    </div>
    <div class="block__element-2"></div>
</div>