Eutectic gallium-indium (EGaIn), a room-temperature liquid metal, has garnered significant attention for its applications in soft electronics, multifunctional materials, energy engineering and drug delivery. A key factor influencing these diverse applications is the spontaneous formation of a native passivating oxide shell that not only encapsulates the liquid metal but also alters the properties from the bulk counterpart. Using environmental scanning transmission electron microscopy, we report in situ observations of the oxidation of EGaIn nanoparticles by ambient air under high-energy electron beam irradiation. Our findings demonstrate that uneven oxide shell growth, driven by inward diffusion of adsorbed O species, creates unbalanced stresses. This compels the liquid metal to deform toward regions with slower oxide growth, resulting in shell rupture and allowing the liquid metal core to flow out. This process initiates top-down self-similar replication of the core-shell liquid metal nanoparticles, causing larger particles to break down into smaller particles. Additionally, internal oxidation triggers phase separation within the liquid core, ultimately leading to the pulverization of the liquid metal into finer solid particles rich in indium. These mechanistic insights into the oxidation behavior of the liquid metal hold practical implications for leveraging this process to reconfigure EGaIn nanoparticles for various applications.