Herb was right, it does boil, experimentally. Here are some details.
Outer container --> sauce pan diam=17.5 cm, depth 11 cm
Inner container --> soup can daim=7.5 cm, depth 10.5 cm
Water in the can 7 cm deep
Water in the pan 10 cm deep
The can (with a bolt and water inside) was floating in the pan
without touching its walls or bottom (about 1 cm above the bottom)
The pan was heated over the glass-top electric range.
The intensity of boiling in the inner container was not a large as in the
outer container (in terms of volume of bobbles/second) but it was clearly
not zero.
My wife said there is a french way of cooking based on this principle, it
is called bain marie. We could not find anything about this in our cook
book.