Right now, Nashorn accepts the FunctionDeclaration grammar production where Statement is expected; that used to be an ill-defined feature of old JavaScript runtimes, but ES5.1 is clear about FunctionDeclaration not being a Statement but rather a SourceElement, and as such it can only appear on the level of Program or FunctionBody, and not in other places where Statement is allowed.

(Note: FunctionExpression can still appear anywhere any expression can)