https://www.haskell.org/ghcup/install/#which-versions-get-installed
latest follows the latest release of every tool, while recommended is at the discretion of the GHCup maintainers and based on community adoption (hackage libraries, tools like HLS, stackage support, etc.) and known bugs.
Cabal 3.8 had a LOT of regressions. 3.10 is eyeballed for being recommended, but there’s still an unfortunate bug that is holding it back: Haddock for crypto-api-0.13.3 fails to build with Cabal 3.10.1.0 · Issue #9060 · haskell/cabal · GitHub
Haddock is core tooling, so we can’t have a half working haddock+cabal+ghc combination. And indeed, it appears bumping ghc recommended to 9.4 would “fix” this. But users who want to stay on 9.2 for some projects will still experience this.
Wrt documenting those things… I think the best way is in fact opening issues against ghcup-metadata repository and discuss it.
Some form of “community pressure” is in fact also part of the selection process. I kept 8.10.7 recommended for a very long time, because it was a great release and no one complained until fairly recently.