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Please see: https://www.ibm.com/support/knowledgecenter/SSD29G_2.0.0/com.ibm.swg.ba.cognos.tm1_ug.2.0.0.doc/c_mathandtrigonometricfunctions_nf0749.html
SUMPRODUCT is not supported on TM1Web. This is why the formula doesn't work. The problem has nothing to do with nesting formulas.
We are not planning on supporting SUMPRODUCT on the web.