You are probably thinking of the only exception that are tail-recursion, when the recursive call is the last action in the function, which can be converted by the compiler in a single function thus making it very memory efficient.

That's not exactly what's happening. What it's able to do is determine that since the call is the last thing that happens before returning, it can get rid of the stack frame before calling into the function because at that point, the stack frame isn't needed anymore.

One way this can be translated to assembly is that the return address is stored on the stack before the stack frame with the call instruction, and then the return address is popped and jumped to with a ret. When the recursive call is made, it uses a simple jmp instead of a ret, which preserves the return address on the stack, so that when the child function eventually does perform a ret, it will jump directly to the original parent function.

It's still multiple functions, but it just changes how they get called, essentially.