Sure if it's indirect I agree it will get messy fast with a dozen functions suddenly needing to handle an additional parameter, but unrelated to that... I'd really like to know who needs recursion for this that's deeper than 3 or 4 levels. What's the use case? Such xml surely would be unreadable and unwritable to humans, but if it's used as some form of exchange format between systems, what would that be? How would it end up with such deeply nested entities? It sounds like something you deliberately implement that way to show how "smart" you are, but not "hey that seems the reasonable thing to do here".

This makes me wonder: does any of the popular xml libs have a sort of safe mode, where custom entities and similar features are disabled, those schema urls ignored, and namespaces just flattened (and whatever else I forgot or don't even know about)? You know for when I know I only need to parse simple xml files that should contain a couple plain tags and attributes, and want to reduce attack surface.