I think generated blueprints need a buffer between the recycler and the assembler and much more careful control about the contents of belts, etc. Try setting it to upcycle rocket silos and run it for a while, possibly at much higher UPS.

I haven't tried it myself with this specific design, but I did something similar myself - it doesn't work for long.

Well, maybe rocket silo is not a great example - that one is deterministic. Landing pad is not. Anything with lots of items that is not a multiple of 4.

Now that you said this, I would say it can be theorically possible, but in pratique not sure,
I used this layout a lot in my runs I don't think I ever saw that situation... if the assembler keeps working it should get rid of the excess inside the recycler buffer (the recycler has it's own buffer).
I did not tested yet the exactly layout of the mod output for long hours (I had a save running for 4h yesterday it seemd fine)

Regarding the belts, the requester chests with "Trash Unrequested Items" option get rid of the excess in the belts so, but is true the original bp author used circuits.

Let me now if you or someone find such situation

What can happen is that if you have legendary quality researched and you create an upcycler for rare/epic quality, the legendary items will be on the belt loop... in the future I'll patch that case

The deadlock I suspect will be in the output from the recycler to the crafter. Try starting a new instance of the game, make a blueprint to upcycle anything with non-multiple-of-four items (say foundry), give it infinite resources and infinite sink for upcycled stuff and let it run at the max possible speed the editor mode can give you. It won't deadlock after 4 hours of real time but it should after some accelerated time.

I don't think it happens and is maybe a question of "luck",

I'm running a Upcycler Loop for 30m for the launching pad and railgun turret at 2500 UPS (that is like 21h of gameplay),

There is already a chest almost filled with landing pads and the recyclers still empty: https://imgur.com/a/giNI5pI
The railgun buffer already has almost half of the slots with legendary railgun turrets and recycler buffers still empty too,
The foundries as you said I added few minutes ago there is already a few legendary ones and recyclers buffers are empty: https://imgur.com/a/ulTbVpE
In all those 3 Upcyclers, all the recyclers buffers are empty,

I think what saves this layout is that the Recycler ejects it's buffer inside the assembler very quickly, before the inserter can pick the items from the requester chest and insert into the assembler... this make the recyclers able to dispose their items without deadlocking.

I'll try to setup the test myself and will let you know if I find any problems. Thanks for checking :)

In my experience it was more like after a week or two. Recycling 4 rocket silos is guaranteed to give you enough resources to make one. This will never deadlock. For foundries - that's not the case. This difference can slowly accumulate, first inside of the assembler, next inside of the recycler. Not in 21 hours probably. But my current save is almost 1000 hours - I started from scratch when 2.1 got out.