Comment 4 for bug 1758389

Please disregard last paragraph in my comment #1. I've found that I was not able to boot with recurse=1 not due of read-only /var, but due of script's attempt to remount absent cdrom for which I have an entry in my /etc/fstab (added by system installer).

Nevertheless, I found new configuration useful to exclude some filesystems from recurse. For example, to properly boot with (separate) read-only /,/boot,/var and read-write /home I use string like below in my /etc/overlayroot.local.conf:
overlayroot="tmpfs:swap=1,debug=1,driver=overlay,recurse=not:cdrom|home".

I checked - this syntax also works for kernel command line, I only had to put recurse option in single quotes like: "... overlayroot=tmpfs:swap=1,recurse='not:cdrom|home'".