Teaching programming -- circular data structures

[Roy Smith]

This is more about how people learn to program than about python, but it 
happened in python, and I know folks here are interested in teaching 
programming...

There's a guy at work who is mostly a self-taught perl and TCL 
programmer.  A while ago, I showed him python, and he's very into it 
now.  We've done a few projects together, of increasing complexity and 
sophistication.

Today, we were working on implementing a particularly gnarly algorithm.  
We had made some headway with coding it up on the fly, and eventually 
ended up abandoning the code because our data structures were a total 
mess.  So, we sat down at the whiteboard and started to design a set of 
classes, with the intent of starting to code again from scratch once we 
had a better idea of how the data was to be organized.  This is, of 
course, how we should have started the first time, but you know how that 
goes :-)

At one point, I sketched out two classes, called rule and indicator.  A 
rule contained (among other things) a list of indicators, and each 
indicator contained a reference back to the containing rule.  At this 
point, things came to a grinding halt when my coworker observed that I 
had just created a circular data structure.  He was aghast that you 
could (although we had no intention to) write things like 
rule.indicator.rule.indicator.rule, and insisted that we had to find 
some other way to design the data structures so this couldn't happen.  
No amount of explaining on my part could convince him that such a thing 
wasn't evil, or horribly confusing.  Although he could not articulate 
exactly what bothered him so much, I think he was vaguely scared of some 
sort of infinite loop in the code.

Is this a common thing?  I, as an experienced programmer, found the 
circular references perfectly reasonable, but it seemed to blow his 
mind.  Have people teaching programming (or, more precisely, data 
structures) see this before; that people have problems understanding 
circular data structures the first time they're exposed to the concept?