Neil Mitchell wrote:

It's a documented bug in GHC:

http://www.haskell.org/ghc/docs/latest/html/users_guide/bugs.html#bugs-ghc

"GHC's inliner can be persuaded into non-termination using the
standard way to encode recursion via a data type"


Thanks Neil!
Sorry for the noise, I should have checked GHC docs before posting.

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