RemoteEvent isn't connecting to a function when function has a sub-function?

Here is my code:

local bullet = game.ReplicatedStorage["Cyborg Assets"].bullet
local head = script.Parent.Parent:FindFirstChild("Head")
local ReplicatedStorage = game:GetService("ReplicatedStorage")
local event = Instance.new("RemoteEvent", ReplicatedStorage)
event.Name = "Cyborg SP1"

local function shootbullet()
    local debounce = false
    local Fireball = bullet:Clone()
    print("remoteEvent recieved")
    Fireball.BrickColor = BrickColor.new("Institutional white")
    Fireball.Transparency = 0
    Fireball.TopSurface = 0
    Fireball.BottomSurface = 0
    Fireball.CanCollide = false
    Fireball.Locked = true
    Fireball.CFrame = head.CFrame*CFrame.new(0,0,-10)
    local BodyVelocity = Instance.new("BodyVelocity")
    BodyVelocity.Parent = Fireball
    BodyVelocity.maxForce = Vector3.new(math.huge, math.huge, math.huge)
    BodyVelocity.velocity = head.CFrame.lookVector*40
local function Hurt(Part)
    local debounce = false
        if debounce == false then
        if Part.Parent:FindFirstChild("Humanoid") then
                Part.Parent.Humanoid.Health = Part.Parent.Humanoid.Health-25
                debounce = true
                wait(2)
                debounce = false
                wait()
            end
        end
        Fireball.Touched:connect(Hurt)
    wait()
    end
event.OnServerEvent:connect(shootbullet)
end

"remoteEvent received" is not appearing inside of the output but when I edit the code to this:

local bullet = game.ReplicatedStorage["Cyborg Assets"].bullet
local head = script.Parent.Parent:FindFirstChild("Head")
local ReplicatedStorage = game:GetService("ReplicatedStorage")
local event = Instance.new("RemoteEvent", ReplicatedStorage)
event.Name = "Cyborg SP1"

local function shootbullet()
    local debounce = false
    local Fireball = bullet:Clone()
    print("remoteEvent recieved")
    Fireball.BrickColor = BrickColor.new("Institutional white")
    Fireball.Transparency = 0
    Fireball.TopSurface = 0
    Fireball.BottomSurface = 0
    Fireball.CanCollide = false
    Fireball.Locked = true
    Fireball.CFrame = head.CFrame*CFrame.new(0,0,-10)
    local BodyVelocity = Instance.new("BodyVelocity")
    BodyVelocity.Parent = Fireball
    BodyVelocity.maxForce = Vector3.new(math.huge, math.huge, math.huge)
    BodyVelocity.velocity = head.CFrame.lookVector*40
end
event.OnServerEvent:connect(shootbullet)
local function Hurt(Part)
    local debounce = false
        if debounce == false then
        if Part.Parent:FindFirstChild("Humanoid") then
                Part.Parent.Humanoid.Health = Part.Parent.Humanoid.Health-25
                debounce = true
                wait(2)
                debounce = false
                wait()
            end
        end
        Fireball.Touched:connect(Hurt)
    wait()
end

Also, when I edit it to this way, the "Fireball" never appears.