TurboTax does it correctly. It does not immediately tax all of the Unrecaptured Section 1250 Gain, as that is not "recapture".
The taxable amount of the installment sale is FIRST applied to the Section 1250 Gain. Eventually, when enough taxable portion of the principal payments of the Installment Sate have been made to 'pay off' the Unrecaptured Section 1250 Gain, then the rest of the taxable payments is applied to Long-Term Capital Gain.
