So the nail caused an infection in the tree?

I guess. I also thought it might have something to do with the metals itself. Like I know Chrome makes blue compounds

Apparently, the tannins in the oak react with the iron to make iron tannate (or tannic acid). This gives it the blue color. Pretty cool.

My wood's got some blue veins too

Iron nails would be hammered into walnut trees to increase the iron content of the nuts

People in the past used a similar reaction to make iron gall ink. They would take the tannins from oak galls and mix with iron to make black ink.

Interesting, I find Oak Galls all the time. I might try this just for the sake of it