Yep, it’s kind of inevitable with any linked system of knowledge. Eventually, you’re going to transclude a note that has a note within it. It doesn’t need to be infinite, but it should be able to resolve at least a few levels. Maybe make it a user-configurable level?
Actually, I don’t really see why it can’t go to an arbitrary level of nests, at least as long as the indentation and aesthetic stops looking “nested” after a while. (Eg. Reddit eventually stops indenting replies in a thread.) At some point, it’s just up to the computer’s memory whether it can get to that level of transclusions or bottoms out, right?