But then there's mental overhead figuring out / remembering what the function does every time you go through the parent function. Once you have it in your head, may as well just label it so you don't have to do that every time.

In longer and more complex examples, declaring a function inline like this is potentially confusing because you don't get to see where it is used

It only exists in the scope of the parent function, the only place it can be used is right next to where is declared. Unless you're in the habit of making functions hundreds of lines long, I guess...