Ultimately it seems that deep recursion after setting the recursion limit actually crashes python

The default recursion limit is 1,000; you're increasing it by a factor of 10. It is documented that raising the recursion limit can cause crashes. What kind of crash are you seeing? Segmentation fault or stack overflow? Also, provide more details about your system: what OS and more importantly in this case, how much RAM?

It's possible that this is not a bug.

Also, see related: bpo-44393

Indeed, this behavior is documented at https://docs.python.org/3/library/sys.html?highlight=setrecursionlimit#sys.setrecursionlimit : "a too-high limit can lead to a crash".

I'd recommend refactoring to use iteration rather than recursion:

    def fact(n):
        product = 1
        for i in range(1, n+1):
            product *= i
        return product