Illegal Entry check is not recusrive

If you have a drop down, say from taxonomy, in the form of:

Item 1
- Sub 1
- Sub 2
Item 2
-Sub 1
-Sub 2

You will always get an 'Illegal entry error' because forms_api currently only checks the root elements of the array, and not the children. This should be fixed, for items such as project.module can not function. This came up when I created a few projects that had taxonomy on them, and then tried to create an issue for them, and I can not because I always get an 'Illegal entry for Project' error.