That's telling you that Net::SFTP, which underlies Net::SFTP::Recursive, only supports SSH2 and not SSH1

Not really!

Net::SFTP implements version 3 of the protocol, that's the one supported by most servers regardless of its supported SSH protocol version.

What happens is that the underlaying buggy Net::SSH::Perl is trying to open two channels inside the same SSH connection but the server only supports one channel per connection:

host.fqdn.tld: channel 0: new [client-session]
host.fqdn.tld: Requesting channel_open for channel 0.
host.fqdn.tld: channel 0: open confirm rwindow 32768 rmax 16384
host.fqdn.tld: channel 1: new [client-session]
host.fqdn.tld: Requesting channel_open for channel 1.
host.fqdn.tld: Channel open failure: 1: reason 4: Server supports one 
+session per SSH client
[download]

Then, Net::SFTP does not check that the channel was successfully open, tries to send the INIT command anyway and fails.

For comparison, opening a SFTP connection with OpenSSH:

$  ssh -v localhost -s sftp
...
debug1: Authentication succeeded (publickey).
debug1: channel 0: new [client-session]
debug1: Requesting no-more-sessions@openssh.com
debug1: Entering interactive session.
debug1: Sending environment.
debug1: Sending env LC_MESSAGES = en_AG.utf8
debug1: Sending env LANG = en_US.UTF-8
debug1: Sending subsystem: sftp
[download]

It just opens a channel and uses it for SFTP.