The locals are a relaxed and friendly bunch—a lot of them told us that it's like what Waiheke Island (now in effect a suburb of Auckland) was in the 1970s when it was a commune of artists and people wanting to escape the city.
当地人都很放松友善——很多人告诉我们,这里很像20世纪70年代的怀赫科岛(如今实际上已成为奥克兰的一个郊区),当时那里是艺术家和想逃离城市的人们聚居的地方。
The main clause contains the that-clause "that it's like ...". Inside it, "what Waiheke Island ... was in the 1970s" is a what-clause functioning as the complement of "like". Within that clause, "when it was a commune ..." is a time clause, and "wanting to escape the city" is a participial phrase modifying "people". These layers create mixed multiple embedding.