Zverev will now play American Jack Sock for second place in the Boris Becker Group after the American - who revealed the fire alarm that disrupted Nadal and Dominc Thiem at an ungodly hour - upset Marin Cilic 5-7, 6-2, 7-6, thus eliminating the Croatian.
He may still have to beat Zverev in his final group match to qualify, with the talented German going up against favourite Roger Federer later on Tuesday.
The Spaniard is the only one of the "Big Four" never to have won the ATP Finals and has pulled out a number of times previously before the event, which is played on a fast indoor surface rather than his favoured clay. "I'm living my dream right now and I wanna keep on going".
Sock claimed five points in a row to set up two match points and he converted the first when a Cilic backhand floated long.
"I'm happy and relieved that I can play freely against [Marin] Cilic, instead of it being a nail-biter".
Cilic had thrown away a break in the decider to lose against Alexander Zverev on Sunday and he managed the same again at London's O2 Arena as Sock fought back to win 5-7 6-2 7-6 (7/4).
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Sock showed the sort of fighting spirit that enabled him to win the Paris Masters title and sneak into the last Finals spot, getting back on serve when Cilic fired a forehand into the tramlines under pressure.
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The American No 1 increased his advantage in the second set with a further break of the Cilic serve to move 4-1 ahead before he served out in style with an ace to force the deciding third set - the fourth time already this week that a match has gone the distance.
"Definitely not a great record, but I felt that I played even well past year", Cilic said.
"He had a really nice season, especially the beginning, now the end".
"I love playing in front of the fans here - they make it feel like home".
"It's definitely disappointing in both matches in that third set after being in a good position and putting myself in a good position". I'm here to win matches.