As far as the "What's the benefit to users?" question goes, I think the main intended beneficiaries would be children and other folks playing at the command prompt and trying out different things.

The "no segfaults from normal Python code" rule aims to make that kind of exploration a significantly more positive experience than it is in a language like C - you're far more likely to get a traceback than you are to have the interpreter fall over completely. Tracebacks can be intimidating to new users, but they still give them new information to work with.

Infinite loops at the Python level are similarly about as friendly to ad hoc exploration as we can possibly make them: Ctrl-C will break you out of them with a traceback.

Implementation level infinite (or near-infinite, or finite-but-eating-all-of-RAM) loops by contrast are much closer to their traditional C level counterparts: your only way out is via destructive termination of the entire process.

So that's why I think this is an idea worth exploring further, even though it may still turn out to be impractical for code readability or runtime speed reasons.