This is still a problem for me, and I haven't had a recommendation playlist with any variety in months.
It turns out I'm not the only user with that problem:
https://listenbrainz.org/user/silverbluep/recommendations/
https://listenbrainz.org/user/The4thGoose/recommendations/
https://listenbrainz.org/user/Capt_Cornflake/recommendations/
https://listenbrainz.org/user/heliumpallo1/recommendations/
https://listenbrainz.org/user/JackRyanTaylor/recommendations/
https://listenbrainz.org/user/jakestanger/recommendations/
https://listenbrainz.org/user/HumHumXX/recommendations/
https://listenbrainz.org/user/laughinginfinity/recommendations/
https://listenbrainz.org/user/greger_jens/recommendations/
All of these users' recommendations as of writing this also only consists of a single artist King Gizzard and the Lizard Wizard (or > 90%).
This is the same issue I have, with the same artist, which means the problem could potentially be related to very prolific artists.
Here is someone with the same issue but with The Beatles:
https://test.listenbrainz.org/user/freakanth/recommendations/
This user has 50% Aphex Twins: https://test.listenbrainz.org/user/finical/recommendations/
These ones have a lot of Radiohead: https://listenbrainz.org/user/hollie_taylor/recommendations/
https://test.listenbrainz.org/user/gracz/recommendations/
And finally this one has about 70% of Pink Floyd: https://test.listenbrainz.org/user/williamfrezze/recommendations/
I did look at my raw recommendations which do have some tracks I haven't listened to before, both from KGLW and from other artists. However my recommendation playlist is only composed of tracks that I have listened to before.
Somehow the recommendation algorithm is doing some overfitting and putting more weight on re-listening to the same songs by that one artist over having some variety or even just listening to songs by that artist that I haven't listened to before.
See code changes in pull request #2653 submitted by amCap1712.