When is this a problem? Daisy chain formulas are always a problem. Daisy chains happen when you have a line item in module A that is referenced in module B, which is then referenced in module C, and so on.
This creates a situation where there is a long dependency chain that has to be calculated. Instead, each module should directly reference the data. The line item in module A is referenced directly in module B and is also referenced directly in module C.
Why is this a problem?
Daisy chain formulas require the engine to work harder. Whenever one data point that is used in the calculation changes, the entire sequence must be re-calculated.
How to correct:
Break up these formulas. Place parts that need to be referenced multiple times in a systems module, creating a single source of truth.