Here's an example that will make you understand what this does.
I have no idea why you would need this but there probably is a reason :).
// These Func's take a char and return a boolean value.
Func<char, bool> f1 = (ch) => ch == 'a';
Func<char, bool> f2 = (ch) => ch == 'b';
char chr = 'a';
// This Func takes a function (of the type we saw above) and returns an integer.
Func<Func<char, bool>, int> func = (foo) => foo(chr) ? 1 : 0;
// Run the complex Func by passing a function as an input param and receiving an integer as a response.
int res1 = func(f1); // 1
int res2 = func(f2); // 0
By your request, here is another example (I still can't find a good usage but whatever):
string text = "TesTinG";
Func<char, bool> IsCapital = ch => ch == char.ToUpper(ch);
int counter = 0;
foreach (char chr in text.ToCharArray())
{
Func<Func<char, bool>, int> func = fn => fn(chr) ? 1 : 0;
counter += func(IsCapital);
}