We control the source code in question, so we deal with it by detecting unexpected recursion and screaming bloody murder.

We have a 'little bit' of recursion where we know that we won't go around the recursion more than once and we've hand-hacked that it. We have similar hacks to deal with indirect calls.

I'm not saying we've solved the problem for arbitrary code; I'm saying that solutions that fall very far short of solving problems for arbitrary codes are still enormously useful. Many compiler optimizations don't work for 'arbitrary code' either, for example, and know just enough to bail out when they see an irreducible flowgraph or a bizarre indirect jump, etc.