Nested object initializer syntax

Resharper has just suggested the following refactoring to me:

// Constructor initializes InitializedProperty but
// the UninitializedSubproperty is uninitialized.
var myInstance = new MyClass();
myInstance.InitializedProperty.UninitializedSubproperty = new MyOtherClass();

// becomes

var myInstance = new MyClass
    {
        InitializedProperty = { UninitializedSubproperty = new MyOtherClass() }
    };

I've never seen this kind of object initialization before. In particular I don't see how

InitializedProperty = { UninitializedSubproperty = new MyOtherClass() }

makes any sense - it's not assigning anything to InitializedProperty.

Is this behaviour specified anywhere?