Add max capabilities when creating nested stacks
diff --git a/localstack/services/cloudformation/models/cloudformation.py b/localstack/services/cloudformation/models/cloudformation.py
index a3bd60abc3b02..e8dd56d8525d1 100644
--- a/localstack/services/cloudformation/models/cloudformation.py
+++ b/localstack/services/cloudformation/models/cloudformation.py
@@ -48,6 +48,12 @@ def get_nested_stack_params(
                 "StackName": nested_stack_name,
                 "TemplateURL": properties.get("TemplateURL"),
                 "Parameters": stack_parameters,
+                # TODO: when migrating to resource provider check parity here
+                "Capabilities": [
+                    "CAPABILITY_AUTO_EXPAND",
+                    "CAPABILITY_IAM",
+                    "CAPABILITY_NAMED_IAM",
+                ],
             }
             return result
 

## Motivation

Nested stacks can also contain transformations and are thus subject to capability checks.
This caused users to report issues regarding failed stack deployments to pop up in support which this PR aims to prevent.

## Changes

- When creating a nested stack (`AWS::CloudFormation::Stack`) it will now always created with all possible capabilities. This should be fixed when migrating to a resource provider.
