This is Shinobi (can verify out of band at @brian_trollz on Twitter, I only signed up to the list with this email to read initially, but feel like I should reply to this as I think I am one of the only people in this space who has voiced concerns with recursive covenants).
My concerns don't really center specifically around recursion itself necessarily, but unbounded recursion in combination with too much generality/flexibility in what types of conditions future UTXOs can be encumbered with based on the restriction of such covenants. Forgive the hand waiving arguments without getting into specific opcodes, but I would summarize my concerns with a hypothetical construct that I believe would be incredibly damaging to fungibility. Imagine a covenant design that was flexible enough to create an encumbrance like this: a script specifies a specific key in a multisig controlled by some authority figure (or a branch in the script that would allow unilateral control by such an authority), and the conditions of the covenant would perpetually require than any spend from the covenant can only be sent to a script involving that key from said authority, preventing by consensus any removal of that central authorities involvement in control over that UTXO. Such a construct would present dangerous implications to the fungibility of individual UTXOs by introducing a totally different risk model in being paid with such a coin compared to any other coin not encumbered by such a condition, and also potentially introduce a shift in the scope of what a 51% attack could accomplish in terms of permanent consequences attempting to coerce coins into such covenants, as opposed to right now only being able to accomplish censorship or temporary network disruption.
I know that such a walled garden could easily be constructed now with multisig and restrictions on where coins can be withdrawn to from exchanges or whatever place they initially purchased from, as is demonstrated by the implementation of the Asset Management Platform by Blockstream for use on Liquid with regulated equity tokens, but I think the important distinction between such non-consensus system designed to enforce such restrictions and a recursive covenant to accomplish the same is that in the case of a multisig/non-consensus based system, exit from that restriction is still possible under the consensus rules of the protocol. If such a construct was possible to build with a recursive covenant enforced by consensus, coins encumbered by such a covenant would literally be incapable of escaping those restrictions without hardforking the protocol, leaving any such UTXOs permanently non-fungible with ones not encumbered by such conditions.
I'm not that deeply familiar with all the working pieces involved in the recent TXHASH + CSFS proposal, and whether such a type of overly (IMO) generalized recursion would be possible to construct, but one of the reasons CTV does not bother me in terms of such concerns is the inability to infinitely recurse in such a generalized way given the requirements to exactly specify the destination of future spends in constructing a chain of CTV encumbrances. I'd very much appreciate any feedback on my concerns, and if this side tracks the discussion I apologize, but I felt given the issue has been mentioned a few times in this thread it was appropriate for me to voice the concerns here so they could be addressed directly.