I am missing something very basic here. Let us assume the shell is at a fixed temperature T by a power generator. The sphere inside will radiate the same power it absorbs. The power radiated by the shell will be $4 \pi \sigma T_{shell}^4 R_{shell}^2$ and will be the same as that absorbed by the smaller sphere and radiated out, which should be $4 \pi\sigma T_{sphere}^4 R_{sphere}^2$, so the sphere should be hotter.
But wouldn't this violate the second law? Isn't this set up equivalent to a closed universe in thermal equilibrium in which the shell can only radiate inwards?