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What does the infinite loop do actually? I thought it lets you keep stats between loops, but buying it just kind of fixes the stats and does not let my buy anything else?

Normally, you keep everything, stats/weapons, everything.

I'll have to check, yes, it's definitely a bug if you don't keep everything. :o 

It allows you to go even further in snowballing, but be careful, it increases the difficulty by 1.

Thank you Agitodev for your feedback :)