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does it know that these links are recip links?
As far as I know Google does not object to reciprocal linking per se. Heavy cross linking refers to a situation were many pages in one site include a link to a page in another site, this is sometimes done to artificially boost the PageRank of the target page.
As far as I know Google does not object to reciprocal linking per se.
I can't tell you how many time I read statements like this and shake my head. Recip links is what the web was built upon. The day that an SE would object to recip links would NEVER happen.
Will they object to cross-linking only within your own domains? Maybe some day.