rB568f0c7 added a recursion check that is supposed to prevent cyclic
cases where a group includes itself via dupli instancing.
The check function was descending into all groups nested inside the
target group - which works for single level recursion like in the test
case, but does not handle generic recursion. Basically it asked:
"is object X in the group already or in any instanced dupligroup?"
The new check instead asks:
"is group G dupli'd by X or any instanced subgroup thereof?"
which is what we really need to know.