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The builder always produces an OpenAPI 3.2 document. The openapiVersion option controls what gets served — '3.1' and '3.0' each run a downconversion pass on the finished document:
payload.config.ts

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Nested tags

Scalar and Swagger UI don’t render OpenAPI 3.2 nested tags yet. The nestedTags option is off by default, so doc.tags is a flat list of per-entity tags with descriptions. Turn it on only if your consumer understands the 3.2 kind/parent tag tree.
When nestedTags: true, the plugin emits the 3.2 tag hierarchy: navigation groups via kind/parent, plus per-entity auth and version sub-tags.

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Downconverting yourself

The downconverters are also exported as toOpenApi30 and toOpenApi31, so you can build a 3.2 document programmatically and convert it in your own code. See Exports.