I may not quite understand what you want. Do you want to burn an ISO 9660 filesystem onto a CD? Then there is a standard for it (ISO 9660 of course). According to ISO 9660 - Wikipedia, the free encyclopedia this standard prescribes a maximum directory tree depth of eight (and there are more restrictions).
Am I right that you complain that burning software (or the software that reads the burned CD) works according to the standard?
I thought you were talking about an ISO 9660 file system on a CD in the first post.
Now you are talking about an ISO file. What is that?
I know that one can copy the complete contents of an ISO 9660 CD to one file on Unix/Linux. Often one then gives that file a name ending in .iso to communicate the fact that it is such a file to humans and some programs alike. This is often called an ISO file for short. And it can be burned to a new CD. But the contents of this file is the same as it being on the CD. So the same features/restrictions apply.
Is this seems to be for backup reasons, you could look into using *tar *with compression to make one file out of a directory tree (without depth restrictions ). Then you would have one (or more, if you have several of those directory trees to backup) files to go to the cd (when they are not to big, there are size restrictions also).
and try something like
tar cfz <tared-gziped-outputfile> <one-or-more-directories>
It has the big advantage IMHO that tar conserves things like correct names, ownership, access-bits, etc. which an ISO 9660 file system does not support.