Execution of a query using two mutually recursive CTEs falls into an infinite loop

create table value_nodes (v char(4));

insert into value_nodes values

  ('v1'), ('v2'), ('v3'), ('v4'), ('v5'), ('v6'), ('v7'), ('v8'), ('v9'),

  ('v10'), ('v11'), ('v12'), ('v13'), ('v14'), ('v15'), ('v16');

create table module_nodes(m char(4));

insert into module_nodes values

  ('m1'), ('m2'), ('m3'), ('m4'), ('m5'), ('m6'), ('m7');

create table module_arguments(m char(4), v char(4));

insert into module_arguments values

  ('m1','v3'), ('m1','v9'),

  ('m2','v4'), ('m2','v3'), ('m2','v7'),

  ('m3','v6'),

  ('m4','v4'), ('m4','v1'),

  ('m5','v10'), ('m5','v8'), ('m5','v3'),

  ('m6','v8'), ('m6','v1'),

  ('m7','v11'), ('m7','v12');

create table module_results(m char(4), v char(4));

insert into module_results values

  ('m1','v4'),

  ('m2','v1'), ('m2','v6'),

  ('m3','v10'),

  ('m4','v8'),

  ('m5','v11'), ('m5','v9'),

  ('m6','v12'), ('m6','v4'),

  ('m7','v2');

set statement max_recursive_iterations=2, standard_compliant_cte=0 for

with recursive

reached_values as 

(

  select v from value_nodes where v in ('v3','v7','v9')

  union

  select module_results.v from module_results, applied_modules

     where module_results.m = applied_modules.m

),

applied_modules as

(

  select * from module_nodes where 1=0

  union

  select module_nodes.m

  from

    module_nodes

    left join

    ( 

      module_arguments

      left join

      reached_values

      on module_arguments.v = reached_values.v

     )

     on reached_values.v is null and

     module_nodes.m = module_arguments.m

  where module_arguments.m is null

)

select * from applied_modules;

drop table value_nodes, module_nodes, module_arguments, module_results;