The standards tell you specifically to handle not going into infinite resolving loops and such.

So "Q: how do you handle resolver loops?" is "A: you handle them."?

I mean, probably true and accurate for many things. But if so that's not really a standard for how to handle it. It just means that, to be compliant, you need to figure it out and doing something about it.

It's why a cycle doesn't just DOS the server.

Er. Not with that explanation. The cache won't be hit until a result is found, instead each request produces another request back to through the cycle to try to get that request. Hence DoS.