Lambda the Ultimate

Earlier this week Microsoft Research Cambridge organised a Festschrift for Luca Cardelli. The preface from the book:

Luca Cardelli has made exceptional contributions to the world of programming
languages and beyond. Throughout his career, he has re-invented himself every
decade or so, while continuing to make true innovations. His achievements span
many areas: software; language design, including experimental languages;
programming language foundations; and the interaction of programming languages
and biology. These achievements form the basis of his lasting scientific leadership
and his wide impact.
...
Luca is always asking "what is new", and is always looking to
the future. Therefore, we have asked authors to produce short pieces that would
indicate where they are today and where they are going. Some of the resulting
pieces are short scientific papers, or abridged versions of longer papers; others are
less technical, with thoughts on the past and ideas for the future. We hope that
they will all interest Luca.

Hopefully the videos will be posted soon.

The following post recently showed up on Planet Haskell: Morte: an intermediate language for super-optimising functional programs. From the post:

Now suppose there were a hypothetical language with a stronger guarantee: if two programs are equal then they generate identical executables. Such a language would be immune to abstraction: no matter how many layers of indirection you might add the binary size and runtime performance would be unaffected.

Here I will introduce such an intermediate language named Morte that obeys this stronger guarantee.

…

The typed lambda calculus possesses a useful property: every term in the lambda calculus has a unique normal form if you beta-reduce everything. If you're new to lambda calculus, normalizing an expression equates to indiscriminately inlining every function call.

I am worried about this because the author explicitly wishes to support both folds and unfolds, and, according to Catamorphisms and anamorphisms = general or primitive recursion, folds and unfolds together have the expressive power of general recursion—so that not every term has a normal form (right?). More generally, it seems to me that being able to offer the strong guarantee that the author offers implies in particular a solution to the halting problem, hence a non-Turing-complete language.

Later, the author says:

You can take any recursive data type and mechanically transform the type into a fold and transform functions on the type into functions on folds.

I have a similar concern here; it seems to me to be saying that folds can express general recursion, but I thought (though I don't have a reference) that they could express only primitive recursion.

Have I got something badly conceptually wrong?