Why ExMethodError Fails?

public IList<IList<T>> ExMethodError() {
    return new List<List<T>>(); // ERROR
}

You're trying to return List<List<T>> where the return type is IList<IList<T>>.

This looks superficially okay, because List<T> is direved from IList<T>.

But here's the key:

Generic interfaces like IList<T> are invariant.

That means:

List<T> implements IList<T>, but List<List<T>> does not implement IList<IList<T>>.

Because variance doesn't apply here.

It will work in this way

// Only works with interfaces that are covariant, like IEnumerable<T>
public IEnumerable<IEnumerable<T>> ExMethodWithCovariance() {
    return new List<List<T>>(); // This works!
}

For further assitance please check this link