Crystallographic theory based on energy minimization suggests austenite-twinned martensite interfaces with specific orientation, which are confirmed experimentally for various materials. Pressure-induced phase transformation (PT) from semiconducting Si-I to metallic Si-II, due to very large and anisotropic transformation strain, may challenge this theory. Here, unexpected nanostructure evolution during Si-I → Si-II PT is revealed by combining molecular dynamics (MD), crystallographic theory, generalized for strained crystals, and in situ real-time Laue X-ray diffraction (XRD). Twinned Si-II, consisting of two martensitic variants, and unexpected nanobands, consisting of alternating strongly deformed and rotated residual Si-I and third variant of Si-II, form {111} interface with Si-I and produce almost self-accommodated nanostructure despite the large transformation volumetric strain of -0.237. The interfacial bands arrest the {111} interfaces, leading to repeating nucleation-growth-arrest process and to growth by propagating {110} interface, which (as well as {111} interface) do not appear in traditional crystallographic theory.