Maternal uncle marrying the daughter of his sister’s son
It is not permissible for your maternal uncle to marry your daughter, because a man’s maternal uncle is also the maternal uncle of his sons and daughters. Allaah says (interpretation of the meaning):
“Forbidden to you (for marriage) are: your mothers, your daughters, your sisters, your father’s sisters, your mother’s sisters, your brother’s daughters, your sister’s daughters, your foster mothers who gave you suck, your foster milk suckling sisters, your wives’ mothers, your stepdaughters under your guardianship, born of your wives to whom you have gone in — but there is no sin on you if you have not gone in them (to marry their daughters), — the wives of your sons who (spring) from your own loins, and two sisters in wedlock at the same time, except for what has already passed; verily, Allaah is Oft‑Forgiving, Most Merciful”
[al-Nisa’ 4:23]
The words “your sister’s daughters” indicate that all daughters of one’s sister are forbidden in marriage, no matter how far the line of descent extends. This includes the daughter of the sister’s daughter and the daughter of the sister’s son, no matter how far the line of descent extends. Al-Qaasimi said: Also included with daughters are their children.
Tafseer al-Qaasimi, 5/86
And Allaah knows best.