The failure mechanism in the 81-84 bikes is actually called 'valve plastic deformation', and is essentially, valve stretching, as you put it. This does NOT increase valve clearance (As measured at the rocker arm end) it REDUCES it (since the valve is essentially growing longer (valve head becomes more tulip shaped). This results in thinning of the edges of the valve head where it contacts the valve seats (can get almost knife edge-thin in extreme cases). Since the majority of the heat dissipation for the valve is through metal mass & contact with the vavle seat, this causes the valve to heat more and deform more rapidly, and the excess heat often ends up causing the head to break off at the weld on the stem and end up holing your piston and scarring the cylinder. What causes this is that the original OEM valve seats for this era of bikes were made of much harder steel with poorer heat conduction ability - BMW changed the seats to better cope with the unleaded fuel requirement, but ended up making things worse in the process. By 1985-86 they had more or less figured it out and changed the seat material again.
On pre-1981 bikes with high mileage engines, the valves can eventually wear (Recede) into the valve seats - these eariler bikes had different valve seat materials and different valves- and this wear also causes reduced valve clearance and subsequent problems.
There are (2) different problems, but if left undiagnosed, can result in similar poor running and engine damage. We've had a few members who've been unfortunate enough to experience valve head separation and subsequent engine damage in the past couple years, and one or two members who have narrowly avoided it!
Incidentally, these (2) issues afflict ALL BMW airheads of the same vintage/model years. The 81-84 valve seat issue is what actually caused BMW to stop shipping R100 bikes (which produced the most heat and thus suffered the worst) for this issue.
Many people don't know the difference between these issues, or they don't care to quibble over the technicalities, so they just generically call it valve recession. The actual recession into the seats issue over the older, pre-81 bikes will generally just give one worse and worse running and failure to idle and a frequent closing up of the valve clearance. The valve plastic deformation of the 81-84 bikes will also do these same things, but if either is left unresolved can result in the valve head separation - this is especially true with the 81-84 valves&seats.