“For behold, I say unto you that as many of the Gentiles as will repent are the covenant people of the Lord; and as many of the Jews as will not repent shall be cast off; for the Lord covenanteth with none save it be with them that repent and believe in his Son, who is the Holy One of Israel.”
This verse is probably the single most important verse in all of Nephi’s writings in shedding light on his world view and his understanding of the Isaiah passages that he extensively quoted. It is also the most revolutionary teaching of the Book of Mormon.
According to Nephi, the covenant that God made with his forefathers centered on faith in Jesus Christ and repentance. That was the precondition for the Abrahamic and Mosaic covenants. Without faith in Christ there is no covenant.
Throughout his writings, Nephi has hinted to this belief. As one who came from a Jerusalem that rejected the savior, Nephi understood that his people would suffer because they rejected the Holy One of Israel. He saw their exile and suffering. He saw the scorn and hatred that would be healed upon them. And he knew that one day his people would be restored to faith and knowledge of Christ.
But Nephi here takes this a step further. Every one who does not believe in Christ is cast off from the covenant. None can be part of the covenant without that faith. And all who gain that faith and repent are joined under the covenant regardless of birth status.