Fun story. My Great Grandfather worked for the Bureau of Indian Affairs. He got word to find a Native that had "the look." My foggy recollection is that he picked Chief Wades in the Water as the subject. (I may be incorrect in this. Wades in the Water was a friend of GG, but may not have been the subject) An artist came out and painted the subject. There was a second Native who also had his face painted. The two paintings were merged into one composite. That likeness is what you see on the Nickel.
Also foggy is who the artist was. It could have been C. M. Russel. Who did come hang out with my Great Grandparents and did paint my Grandmother as a child. (painting is lost. Darn it!). But the possibility of Russel making this painting is better than zero.
UPDATE: a little google research shows that family lore and internet lore don't always match. No idea what is correct. Here is a link:
https://uscoinsandjewelry.com/blog-article/the-face-behind-the-five-cent-indian-head-nickel