On StackOverflow, there is a discussion (in fact it was this discussion that led to the entry in the bug database) in which participants agree that the behavior is confusing and perhaps unexpected, but do not agree on whether it is actually a bug. There seem to be different ways to read the spec.
Here's an example:
Stream.iterate(0, i->i+1).findFirst()works as expected, while
Stream.of("").flatMap(x->Stream.iterate(0, i->i+1)).findFirst()will end up in an infinite loop.
The behavior of flatMap becomes still more surprising when one throws in an intermediate (as opposed to terminal) short-circuiting operation. While the following works as expected, printing out the infinite sequence of integers
Stream.of("").flatMap(x -> Stream.iterate(1, i -> i + 1)).forEach(System.out::println);the following code prints out only the "1", but still does not terminate:
Stream.of("").flatMap(x -> Stream.iterate(1, i -> i + 1)).limit(1).forEach(System.out::println);
I cannot imagine a reading of the spec in which this were not a bug.