Nightly has been updated from MySQL 5.6 to MySQL 5.7.
I've been testing locally on 5.7 and it's been fine, it should be fine for the 10 instance but I didn't test that at all.
QA for Sakai 10 was done on 5.5.x (and Oracle 11g)
QA for Sakai 11 was done on 5.6.x (and Oracle 12c SE1)
QA for Sakai 12 will be done on 5.7.x (and Oracle 12c SE2)
Our minimum requirement for Sakai 12 will likely still be 5.6. But I'd probably suggest 5.7 minimum for Sakai 13 (ideally in 2018) so we can get "on by default" longer index support to implement utf8mb4 without configuration changes.