How do I make this loop all children recursively?

You can use BFS to find all the elements.

function(element) {
    // [].slice.call() - HTMLCollection to Array
    var children = [].slice.call(element.children), found = 0;
    while (children.length > found) {
        children = children.concat([].slice.call(children[found].children));
        found++;
    }
    return children;
};

This function returns all the children's children of the element.

Normally you'd have a function that could be called recursively on all nodes. It really depends on what you want to do to the children. If you simply want to gather all descendants, then element.getElementsByTagName may be a better option.

var all = node.getElementsByTagName('*');

for (var i = -1, l = all.length; ++i < l;) {
    removeTest(all[i]);
}

function allDescendants (node) {
    for (var i = 0; i < node.childNodes.length; i++) {
      var child = node.childNodes[i];
      allDescendants(child);
      doSomethingToNode(child);
    }
}

You loop over all the children, and for each element, you call the same function and have it loop over the children of that element.

There's no need for calling the 'allDescendants' method on all children, because the method itself already does that. So remove the last codeblock and I think that is a proper solution (á, not thé =])

            function removeTest(child){     
                if(hasClass(child, "lbExclude")){
                    child.parentNode.removeChild(child);
                }
            }

            function allDescendants (node) {
                for (var i = 0; i < node.childNodes.length; i++) {
                  var child = node.childNodes[i];
                  allDescendants(child);
                  removeTest(child);
                }
            }           

            var children = allDescendants(temp);