Well, I managed to figure it out myself. I have to specify the parameters of the nested property in my own dto mapping. However, let me know if there is another better way to do this.
Mapper.CreateMap<EntityType, EntityTypeDto>()
.ForMember(dest => dest.Properties, opt => opt.Ignore());
Mapper.CreateMap<Node, NodeDto>()
.ForMember(dest => dest.ChildNodes, opt => opt.Ignore());
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