CREATE FUNCTION dbo.test5(@i int)
RETURNS INT
AS
BEGIN
RETURN(
SELECT TOP 1
CASE
WHEN @i = 1 THEN 1
WHEN @i = 2 THEN 2
WHEN @i = 3 THEN  dbo.test5(1) + dbo.test5(2)
END
);

SELECT dbo.test5(3);

(No column name)
3

CREATE FUNCTION dbo.test6(@i int)
RETURNS INT
AS
BEGIN
RETURN(
SELECT TOP 1
CASE
WHEN @i = 1 THEN 1
WHEN @i = 2 THEN 2
WHEN @i = 3 THEN (SELECT dbo.test6(1) + dbo.test6(2))
END
)END;

SELECT dbo.test6(3);

SELECT dbo.test6(2);

<ColumnReference Column="Expr1002" />
<ScalarOperator ScalarString="CASE WHEN [@i]=(1) THEN (1) ELSE CASE WHEN [@i]=(2) THEN (2) ELSE CASE WHEN [@i]=(3) THEN [Expr1000] ELSE NULL END END END">

<ColumnReference Column="Expr1000" />
<ScalarOperator ScalarString="[dbo].[test6]((1))+[dbo].[test6]((2))">