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The issue is a stack exhaustion. Examples can be trivially made for any iterator that takes another iterator as argument: itertools.takewhile(), zip() in Python3, etc. etc.
It's just one of many places where CPython does a recursion without checking the recursion depth. CPython still works, based on the resonable assumption that doing such a recursion here is obscure.
Someone seriously bored could start with some C-based callgraph builder; or alternatively use PyPy, which finds such recursions automatically in its own source, and compare all places where a recursion check is inserted with the corresponding place in CPython. There are a large number of them (761, not counting the JIT), so be patient :-(