indent=True just makes json to use Python implementation instead of C implementation. Python implementation uses closures which reference one other. Simple example not involving json is:

import gc

def f():
    def g():
        return h
    def h():
        return g
    return

gc.set_debug(gc.DEBUG_LEAK)
while True:
    f()
    gc.collect()
    print(f"garbage count: {len(gc.garbage)}")


The "leak" is caused by using gc.set_debug(gc.DEBUG_LEAK). gc.DEBUG_LEAK includes gc.DEBUG_COLLECTABLE, gc.DEBUG_UNCOLLECTABLE and gc.DEBUG_SAVEALL. gc.DEBUG_SAVEALL causes garbage-collected objects to be saved in gc.garbage for inspection. In normal circumstances they are collected.