Friedel Crafts Alkylation reactions, being a subclass of electrophilic aromatic substitution, involves the aromatic ring acting as a nucleophile. For this particular reaction, though, the nucleophile is severely crippled by the nitro group, as it is a strong electron withdrawing group/deactivator like you said. Therefore, the nucleophile is not strong enough to attack the alkyl chlorine-aluminum trichloride adduct. Hope this helps?