Brain does not perform recursive algebraic simplifications (which is, probably, the most beautiful abstraction humans have produced - fixed points, Y-Combinator, etc), it performs structure-based pattern matching - "it looks like a duck".
Natural selection, it seems, would select a crudest, good-enough model, full of cues, short-cuts and heuristics learned from environment, instead of evolving a beautiful, universal recursive meta-circular evaluator, which MIT guys are worshiping (what else there is to worship, but a beauty?!)
And, of course, mutually recursive processes (physical processes which could be abstracted out and formalized that way) are everywhere in biology. It just happen that language is a pattern matching, not an algebra, like everything else in the brain. Algebras, like numbers, does not exist outside our heads.)