I see in the issue history that this behavior was discussed in the issue
#2936. The problem depends on the web browser. I use Firefox (Iceweasel). I can confirm that Konqueror parses the README.rst OK
I have a README.rst file in one repository of bitbucket and I can see that some text itemized with - are incorrectly parsed with bitbucket if it compared with rst2html tool. I attach two screenshots with the results of my README.rst parsed by bitbucket and by rst2html (with the options -g -t -s --language=es --no-compact-lists --no-compact-field-lists).
As you can see, with nested itemized sections, the bitbucket parser puts the text not in the same line as the item mark.
Is it a bug?