I just realized that there is an easy way to investigate this strange
behavior that does not require a system with a large amount of memory.
Just add the following as the first line of the root creation procedure:

   set_max_mem (50_000_000)

Then it will never allocate more than about 50 MB but the same unfriendly
behavior (continuing to run but *very* slowly and eventually raising an out of
memory exception) will occur.  I made this change and confirmed that the
system will run for a long time before it finally reports "out of memory".