If you do this, it is no longer OTP.

I think it still is:

1. Alice and Bob set up their OTP

2. Alice randomly generates a new OTP

3. Alice encrypts the new OTP with the original OTP and sends the ciphertext to Bob

4. Bob decrypts... the new OTP

5. Alice and Bob burn the original OTP

6. Now Alice and Bob have a copy of the new OTP

I mean, it's pointless. But I don't see how it isn't secure.

For those who do not know exactly how OTP works:

jancsika is right in the sense that this is possible, but meaningless. The reason for that is that in OTP, you use your key ("pad") for every transmission, in 1-to-1 ratio to amount of data being transmitted. And you can only use your key once (hence "one time pad")

So let's say you brought 1000 MB of OTP keys to embassy in diplomatic mail, you can use it to send up to 1000 MB of encrypted data, and then you have to get a new one. If you are low on OTP keys, and you use it to send a new one, you'll have to spend 100 MB of "old" OTP keys to get 100 MB of "new" OTP keys -- entirely pointless process, as amount of unused key data won't change.

On the other hand, if Alice and Bob are just constantly sending each other these messages as a pointless exercise, the traffic they generate by doing so would technically make the exercise rise above the level of pointlessness. :)