The most interesting part of this story is considering what it would've been like if they decided to forbid recursion. Protecting the call stack from it would've been incredible overhead back then - either that or they would've had to enforce strict dependency ordered compilation and even then..
I imagine John McCarthy and the others who wanted recursion just sitting back and smiling, recognizing that that there was no need to press - it was just a matter of time.
The boring way would anticipate C with "the behavior in that case is undefined"; it sounds like the less-formal attempt was like that. Cynically I'd expect such an outcome from a committee design, so Algol really was something special.
I imagine John McCarthy and the others who wanted recursion just sitting back and smiling, recognizing that that there was no need to press - it was just a matter of time.