The behavior of recursive authority has always existed in Hive. Your link to the recent code is a red herring: it's just a refactor of previously existing code. You can easily see that by looking at earlier code in the repo where you can see that the constant HIVE_MAX_SIG_CHECK_DEPTH has long existed. Nonetheless, I briefly reviewed the code with the guy who wrote the code you mentioned and we confirmed to a reasonable level of certainty that the original code behaved the same way.

It's an intended behavior, and it existed in BitShares as well. I wasn't personally involved in the design of hierarchical authorities, but I vaguely remember discussions about it back in the day. The ability to indirectly delegate authority was considered an important function, since BitShares was designed to support organizations. I suppose these features aren't so important for Hive, since Hive accounts are generally just owned by individuals. But I don't think it is a good idea to change this behavior now: it is not a minor change and could have unintended consequences.

If you've given your authority to anyone else, they can always indirectly delegate your authority anyways by setting up a bot. In the end, I think the most important lesson should be that anyone who is accepting authority from a lot of other people should be very careful who they then delegate authority to.