Recursively extracting something extracts all tags associated with it (referenced by dependencies) as well. For instance, if you were to extract a [vehi], it would extract that vehicles [weap], [mode], the shaders for the [mode]...everything.
Parsing is the same concept but deals with reflexives. Sometimes reflexives reference to external data in another tag. Parsing extracts the externally referenced data and reassembles the meta so everything is internal to the tag. This is useful when editing [effe] meta because most of the data is shared so if you edit one, you edit them all. Parsing eliminates the sharing.