Test on a device or on their app. They have lots of interesting quirks on top of the usual ADE issues.
Either way, that error message just indicates that their web-based manuscript editor has very limited support for basic EPUB books, and so it usually refuses to let you edit the EPUB book if doing so would end up breaking things badly enough. The manuscript editor couldn't even deal with my EPUB 2 submissions, much less my EPUB 3 submissions. It's not a problem.
And yes, I submit all my books to them as EPUB 3 these days. I haven't seen any problems from doing so. With that said, I include all the optional/deprecated EPUB 2 compatibility bits, and you should too, because Nook doesn't really support EPUB 3, last I checked.
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