I doubt it. I built my first book, a guide to reading ballistic forensic evidence, with a two-tiered TOC the same way you are describing (with Sigil). On Calibre you can "tier" the TOC up and down but on the Kindle 3 –it shows all the levels and it doesn't appear there is anyway to toggle the level up or down. Curiously on the Kindle for Mac, only the first level shows in the TOC with no way to fully open the TOC. On my iPod, all levels show on the Kindle for iPhone with no apparent way to compress it. I think it's a software issue on the device.
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