however, after first iteration, modification in %newhash also modifies %hashcopy. I am not able to understand the reason behind such behaviour in nested hashes. Please help!

Its simple, it boils down to

my %newhash;
my %hashcopy;
my %other;
$hashcopy{something} = \%other;
$newhash{something} = \%other;
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$newhash{something} and $hashcopy{something} are the same thing, a reference to %other;