On the word "recording"
I agree with mudcrow. To me the word "recording" will always mean the original act of performance/recording, as in "what year did the Rutles record their first album?"
On the number of levels
I agree with reosarevok. Further levels should only be created if doing so won't create (even more) confusion.
caller#6's use case
Miles Davis recorded 'round Midnight 35 times.
MB currently has 136 "recordings" of 'round Midnight by Miles Davis. 
I might have the time to add all the performance ARs to the 35 session/recordings before I die. I definitely will never have time to add duplicates for each of the remaining 101 tracks.
This is not an edge case in Jazz.
As a MusicBrainz user, I'm interested in finding the 35 session/performance/recordings. If I need to know which releases have decent audio-quality, I'll check the amazon reviews.