Yes, this is all by design. The interpreter *has* to stop: either it stops in a controlled way (the fatal error) or the stack is blown and it crashes. If you think the fatal error (basically a C abort() call) should be replaced with another way of exiting, please suggest so.

(actually, it's not the interpreter as a whole, only the current thread, but crashing a thread without affecting the others is probably impossible, due to reference leaks, resource cleanup, etc.)