Applying on a relatively low poly character, nanite breaks the edges of the mesh
It moves the vertices widening the opening of detached meshes, creating large holes visible at close distances. Also, how show in the bottom side of the torso, it also creates artifacts extending the mesh.
Possible Solution: If the mesh has unconnected vertices it should keep them in place or at least give us the option to preserve the external shape as close as possible to the original.