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The code you offered won't work correctly for all
environment variable returns.  An example that would kill
your code:
%SYSTEMROOT%\System32

def expandfull(var, rem=3):
    if not rem:
        return expandvars(var)
    a = expandvars(var)
    b = a.split('\\')
    c = []
    for i in b:
        if '%' in i:
            c.append(expandfull(i), rem-1)
        else:
            c.append(i)
    return '\\'.join(c)

The above would work properly for all environment variables.