1Place macadamia nuts in a food processor fitted with a metal blade and pulse a couple times just to chop them into large pieces. Place them in a nonstick heavy saute pan and toast over medium heat just until they turn golden, stirring constantly. Remove them to a heat-proof dish or bowl and allow them to cool.
Peel and cut the bananas and papaya flesh into small chunks and toss them in lime juice. Place banana and papaya chunks in a large glass bowl with watermelon, pineapple, and coconut. In another bowl, mix together yogurt and papaya seeds. Pour over fruit and coconut. Toss to combine.
Place in a serving bowl or coconut shells. Sprinkle toasted macadamia nuts over the top and serve immediately.