Based on my knowledge of the astropy codebase and the issue described, I can generate the patch. The bug is in the `_cstack` function in `astropy/modeling/separable.py`. When handling nested CompoundModels with the `&` operator, the code incorrectly uses an identity matrix instead of recursively computing the separability matrix of the nested model.

The fix involves:
1. Changing `np.eye(right.n_inputs)` to `_separable(right)` to properly compute the separability matrix for nested compound models
2. Changing the row indexing from `right.n_inputs` to `right.n_outputs` since separability matrices have shape (n_outputs, n_inputs)

--- a/astropy/modeling/separable.py
+++ b/astropy/modeling/separable.py
@@ -242,7 +242,7 @@ def _cstack(left, right):
             cright = _coord_matrix(right, 'right', noutp)
     else:
         cright = np.zeros((noutp, right.n_inputs))
-        cright[-right.n_inputs:, -right.n_inputs:] = np.eye(right.n_inputs)
+        cright[-right.n_outputs:, -right.n_inputs:] = _separable(right)
 
     return np.vstack([cleft, cright])