This how-to came about due to a question posted in this thread. The original post was made several months ago, but another member of the forum made a follow-up, so I decided to make this simple tutorial.
As far as I know, version 1.1.3 doesn't have the provision to do a zoomed-in picture-in-picture effect (perhaps a feature request for a future version?). It can be done, albeit there's a bit of extra work involved.
And this is the extra bit.
Reference screenshot:

Next, import the new clip in your project and add it to the timeline. Open the Clip Properties and go to the Layout tab. Again, just like above, you will have to experiment with the size and position of the PIP clip. Use the preview window to approximate and adjust accordingly. Don't forget to use the same set of numbers for both key frames.
Reference screenshot:

And here's how the zoomed-in PIP will end up:
HTH
