Factory 1 means Small Factory
Factory 2 means Big Factory

Steps to reproduce

1. Research Factory 1, Factory 2 and DO NOT research Recursion 1
2. Place stuff inside a Factory 1
3. Pick Factory 1 up
4. Place a Factory 2
5. Place Factory 1 inside Factory 2
6. Pick Factory 1
7. Place Factory 1 in the World and go in. Factory is blank

While it should not be possible to go in the Factory 1, it should not clear the dimension.

Can't reproduce, everything works fine for me. Are you sure you didn't use a different Factory 1 by accident?