I do not think this is empirical evidence that it is bad for search engines, but its definitely bad practice. He even has his own alias - divitis
This is usually due to ignorance of what can be done using CSS. Of course, sometimes with complex layouts you may need to nest divs, and that’s normal, you cannot have absolutely semantic websites all the time. But I believe that no matter how complicated any layout, I should never go to more than 2 or 3 depths.
In fact, the most common attachment you will see is a full-body container to center the layout - this is common, because if, for example, you have three divs in the root and all three are centered due to rounding errors, they can be pixels from each other at different window sizes.
Hope this helps.
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