we didn't explicitly specify that the current instantiation does not cause an implicit instantiation

[temp.inst] p16

There is an implementation-defined quantity that specifies the limit on the total depth of recursive instantiations ([implimits]), which could involve more than one template. The result of an infinite recursion in instantiation is undefined.

has an example that:

template<class T> class X {
  X<T>* p;    // #1      // OK
  X<T*> a;    // #2      // implicit generation of X<T> requires
                    // the implicit instantiation of X<T*> which requires
                    // the implicit instantiation of X<T**> which …

  // an extra example
  explicit(sizeof(X<T>)>1) operator int(){  // #3
      return 0;
  }
};

In either case of the three, the injected-class-name X is used as a template-name as per [temp.local] p1. That means, all the use of X can be replaced by ::X. [temp.inst] p2 states that

Unless a class template specialization is a declared specialization, the class template specialization is implicitly instantiated when the specialization is referenced in a context that requires a completely-defined object type or when the completeness of the class type affects the semantics of the program.

The operand of sizeof requires the operand to have a completely-defined object type and the class template specialization X<T> is not a declared specialization, thus, that operand should cause the implicit instantiation of X<T>, the implicit instantiation for X<T>, in turn, causes the implicit instantiation of explicit(sizeof(X<T>)>1) , which process is recursive.

We do not have a sufficient reason that can interpret why the current instantiation won't cause that non-reasonable instantiation that would violate [temp.inst] p16.

Start by reading [temp.inst] paragraphs 2 and 16 alongside [temp.local] paragraph 1 and the referenced [implimits] wording. Determine how the current-instantiation example interacts with implicit instantiation, then clarify the draft so the intended non-recursive behavior is explicit and the interpretation is resolved.