The generalist in me is inclined to suggest a "depth" parameter (with depth=1 equivalent to direct dependencies only, and depth = None meaning all dependencies), but I must admit I don't have a concrete use case for the extra generality. So the simpler, recurse/don't recurse approach is probably a better option (building a depth-limited search on top of the recursion flag wouldn't be difficult anyway).

Aside from missing docs and unit test updates, the idea seems sound.