This bug was beautifully characterised in Trac #12776,
which showed a small program for which the inliner went
into an infinite loop.  Eeek.

It turned out to be a genuine and long-standing bug in
the occurrence analyer, specifically in the bit that
identifies loop breakers.  In this line

  pairs | isEmptyVarSet weak_fvs
        = reOrderNodes   0 bndr_set weak_fvs tagged_nodes []
        | otherwise
        = loopBreakNodes 0 bndr_set weak_fvs loop_breaker_edges []

the 'tagged_nodes' should be 'loop_breaker_edges'.
That's it!

The diff looks a lot bigger because I did some work on
comments and variable naming, but that's all it is.  We
were using the wrong set of dependencies!

I'm astonished that this bug has not caused more trouble.
It dates back to at least 2011 and maybe further.