There's a new block in the Gutenberg plugin called post-content. I've discovered multiple ways of causing Gutenberg to go into an infinitely recursive loop. While trying to reason what the output should be when recursion is detected, I created a test case using the [bw_pages] shortcode which was equivalent to the scenario I'd tried using FSE. Two pages that would recursively embed each other ad infinitum.
Imagine my surprise when I discovered that my shortcode suffered the same problem.

Steps to reproduce

1. Create two identical pages with the same shortcode. One called A, the other called C.

[bw_pages post_type=page format="T d e/C" post_parent=0 orderby=title numberposts=3]

2. Create two other pages B and C - with normal content.
3. Attempt to view either A or C.
4. Wait a long time.

Details

In order to create a display that's a bit more understandable I decided it might be easier to
create 4 pages to be used in the test scenario.
A and C contain the problematic shortcode.
B and D are just for a bit of padding.

Expected output

Note: Both [bw_pages] and core/post-content attempt to prevent the recursion by excluding themselves from the result set.
When the shortcode's format parameter doesn't include C - for Content - then the problem shouldn't occur.
Try this with E for Excerpt.

When viewing A, with format="T e / C" the processing should be:

• A's content before the shortcode should be displayed
• A runs [bw_pages] which returns B, C and D
• B is formatted: Title edit and the rendered content
• C is formatted: Title edit
  • And content is expanded. [bw_pages] returns A, B and D
  • A is formatted: Title edit
  • Recursion is detected
  • B is formatted as before
  • D is formatted
• C's content after the shortcode is rendered
• D is formatted

Here's the screen capture for A

And here's the screen capture for C

Additional notes
I added another line of code into the bw_pages() function that prevents double expansion of the top level post.

// Don't process the current post inside the loop
bw_process_this_post( $cp );