SVG use element and cycles

In SVG, the <use> element can be used to create a cycle by linking to a
parent node.  Is this allowed?  How should it be handled?

For example, here is a specific test case that is giving me some trouble.

<svg xmlns="http://www.w2.org/2000/svg">
<g id="foo">
<svg xmlns:xlink="http://www.w3.org/1999/xlink" xmlns:xl="
http://w3.org/1999/xlink">
<use xl:href="#foo"/>
<g id="bar" />
<use xlink:href="#bar"/>


[ Note that the first <g> tag is a start-tag, and not an empty-tag ]

First of all, it is not well formed xml, so that's perhaps reason enough to
reject it.  But even if it were well-formed XML the structure of it is
strange -- I have a problem with the idea of having a <use> element refer to
its own grandparent element.  This would case a cycle in my mind, and should
probably be disallowed.

What does the spec have to say about the validity of this, and specifically
the potential cycles that would be created by having a <use> element refer
to one of its ancestor nodes?

- Chad