Are you certain Nibbles is a male? I heard its not easy to sex some cockatiel mutations and that DNA testing is sometimes required.
I have the exact same behavioral problem with my budgie Rocky. I hand raised Rocky from hatching and she's now seven months old and sexually mature (brown cere). She is very tame, playful, self confident, fearless and friendly but as soon as she weaned and began flying (not a "baby" anymore) she began using her beak to explore, nibble and chew on all things, fabrics, surfaces, and, unfortunately, our skin and ears! We LOVE Rocky so much and want her to be happy. We let her out of her cage to fly and play for several hours every day (always supervised) and she flies to us right away but we must wear long sleeved hoodies to protect our skin from her exploratory nips. She isn't being aggressive, fearful or mean. I just don't think she understands that "beaking" our skin hurts! She's independent enough to entertain herself both inside and outside her cage. I've tried just about everything to teach her not to treat our skin the same way she treats every other surface but she doesn't seem to get it.
I have had a lot of budgies over the past 40+ years. Rocky is the only one that "bites" like this, but all my other pet budgies have been males and I've read that tameness be
ing equal, males are less likely to be nippy. Everything I've read says that female budgies have a very strong chewing instinct not shared by males because they excavate the nest cavities. It makes perfect sense! Of course not all female budgies take their natural chewing instinct to the degree Rocky does, but it explains her behavior.
However, I don't know if female cockatiels can exhibit similar behavior or if there is some other explanation for similar behavior.