The help file says
Functions reentrancy
Functions [sic] reentrancy is allowed. Remember that the AVR has memory limitations that can vary between MCUs.
This is also said, and it is probably incorrect, being relevant for non-AVR microprocessors, or any microprocessor with with no RAM, only registers.
Divergence from the Basic Standard
Function recursion is not supported because of no easily-usable stack and limited memory
Indeed, I compiled recursive calls for procedures and functions, including some with more parameters than can fit in registers, and it looked to me as if the compiler correctly used stack frames in recursion. Perhaps the document's statement applies to PIC.