more context for the feature: https://github.com/lightningnetwork/lnd/pull/3915

allow-circular-route is disabled by default to prevent a peer from using you to move funds both out and then back into themselves. This doesn't prevent you from circular routing someone's rebalance through multiple hops, just that you wouldn't be the single source of rebalancing. This might not sound like an issue, but it can be part of a type of griefing attack where someone opens a connection to your node, then saturates your pending HTLCs with circular rebalances: https://github.com/lightningnetwork/lnd/issues/3771

IMHO, this is not something most small nodes need to worry about and you might have a valid use-case for doing this between two nodes that you own that are connected to each-other. It would be more useful if this feature were updated to be an allow-list of circular-routing friendly peers (so you could selectively enable this use-case but not allow random connectors to do this).

; If true, our node will allow htlc forwards that arrive and depart on the same
; channel.

But I am still unsure.