Bash bad substitution with subshell and substring

Question

A contrived example... given

FOO="/foo/bar/baz"

this works (in bash)

BAR=$(basename $FOO) # result is BAR="baz"
BAZ=${BAR:0:1}       # result is BAZ="b"

this doesn't

BAZ=${$(basename $FOO):0:1} # result is bad substitution

My question is which rule causes this [subshell substitution] to evaluate incorrectly? And what is the correct way, if any, to do this in 1 hop?