diff --git a/packages/svelte/CHANGELOG.md b/packages/svelte/CHANGELOG.md
index bb61b50dd559..cd6a4a916c57 100644
--- a/packages/svelte/CHANGELOG.md
+++ b/packages/svelte/CHANGELOG.md
@@ -1,5 +1,15 @@
 # svelte
 
+## 5.38.2
+
+### Patch Changes
+
+- perf: run blocks eagerly during flush instead of aborting ([#16631](https://github.com/sveltejs/svelte/pull/16631))
+
+- fix: don't clone non-proxies in `$inspect` ([#16617](https://github.com/sveltejs/svelte/pull/16617))
+
+- fix: avoid recursion error when tagging circular references ([#16622](https://github.com/sveltejs/svelte/pull/16622))
+
 ## 5.38.1
 
 ### Patch Changes
diff --git a/packages/svelte/package.json b/packages/svelte/package.json
index 8904c103e31a..fc7db9598d9d 100644
--- a/packages/svelte/package.json
+++ b/packages/svelte/package.json
@@ -2,7 +2,7 @@
   "name": "svelte",
   "description": "Cybernetically enhanced web apps",
   "license": "MIT",
-  "version": "5.38.1",
+  "version": "5.38.2",
   "type": "module",
   "types": "./types/index.d.ts",
   "engines": {
diff --git a/packages/svelte/src/internal/client/dev/inspect.js b/packages/svelte/src/internal/client/dev/inspect.js
index c593f2622ca8..f79cf472991a 100644
--- a/packages/svelte/src/internal/client/dev/inspect.js
+++ b/packages/svelte/src/internal/client/dev/inspect.js
@@ -26,7 +26,7 @@ export function inspect(get_value, inspector = console.log) {
 			return;
 		}
 
-		var snap = snapshot(value, true);
+		var snap = snapshot(value, true, true);
 		untrack(() => {
 			inspector(initial ? 'init' : 'update', ...snap);
 		});
diff --git a/packages/svelte/src/internal/client/dom/operations.js b/packages/svelte/src/internal/client/dom/operations.js
index fb269e47e0fe..abc29a7670cb 100644
--- a/packages/svelte/src/internal/client/dom/operations.js
+++ b/packages/svelte/src/internal/client/dom/operations.js
@@ -6,6 +6,7 @@ import { get_descriptor, is_extensible } from '../../shared/utils.js';
 import { active_effect } from '../runtime.js';
 import { async_mode_flag } from '../../flags/index.js';
 import { TEXT_NODE, EFFECT_RAN } from '#client/constants';
+import { eager_block_effects } from '../reactivity/batch.js';
 
 // export these for reference in the compiled code, making global name deduplication unnecessary
 /** @type {Window} */
@@ -214,6 +215,7 @@ export function clear_text_content(node) {
  */
 export function should_defer_append() {
 	if (!async_mode_flag) return false;
+	if (eager_block_effects !== null) return false;
 
 	var flags = /** @type {Effect} */ (active_effect).f;
 	return (flags & EFFECT_RAN) !== 0;
diff --git a/packages/svelte/src/internal/client/proxy.js b/packages/svelte/src/internal/client/proxy.js
index 3ae4b87ed5d6..dae3791eb0c7 100644
--- a/packages/svelte/src/internal/client/proxy.js
+++ b/packages/svelte/src/internal/client/proxy.js
@@ -93,9 +93,11 @@ export function proxy(value) {
 
 	/** Used in dev for $inspect.trace() */
 	var path = '';
-
+	let updating = false;
 	/** @param {string} new_path */
 	function update_path(new_path) {
+		if (updating) return;
+		updating = true;
 		path = new_path;
 
 		tag(version, `${path} version`);
@@ -104,6 +106,7 @@ export function proxy(value) {
 		for (const [prop, source] of sources) {
 			tag(source, get_label(path, prop));
 		}
+		updating = false;
 	}
 
 	return new Proxy(/** @type {any} */ (value), {
@@ -284,13 +287,13 @@ export function proxy(value) {
 			if (s === undefined) {
 				if (!has || get_descriptor(target, prop)?.writable) {
 					s = with_parent(() => source(undefined, stack));
-					set(s, proxy(value));
-
-					sources.set(prop, s);
 
 					if (DEV) {
 						tag(s, get_label(path, prop));
 					}
+					set(s, proxy(value));
+
+					sources.set(prop, s);
 				}
 			} else {
 				has = s.v !== UNINITIALIZED;
diff --git a/packages/svelte/src/internal/client/reactivity/batch.js b/packages/svelte/src/internal/client/reactivity/batch.js
index 123bc95d163a..60fa03c56cd2 100644
--- a/packages/svelte/src/internal/client/reactivity/batch.js
+++ b/packages/svelte/src/internal/client/reactivity/batch.js
@@ -292,12 +292,12 @@ export class Batch {
 			if (!skip && effect.fn !== null) {
 				if (is_branch) {
 					effect.f ^= CLEAN;
+				} else if ((flags & EFFECT) !== 0) {
+					this.#effects.push(effect);
+				} else if (async_mode_flag && (flags & RENDER_EFFECT) !== 0) {
+					this.#render_effects.push(effect);
 				} else if ((flags & CLEAN) === 0) {
-					if ((flags & EFFECT) !== 0) {
-						this.#effects.push(effect);
-					} else if (async_mode_flag && (flags & RENDER_EFFECT) !== 0) {
-						this.#render_effects.push(effect);
-					} else if ((flags & ASYNC) !== 0) {
+					if ((flags & ASYNC) !== 0) {
 						var effects = effect.b?.pending ? this.#boundary_async_effects : this.#async_effects;
 						effects.push(effect);
 					} else if (is_dirty(effect)) {
@@ -584,6 +584,9 @@ function infinite_loop_guard() {
 	}
 }
 
+/** @type {Effect[] | null} */
+export let eager_block_effects = null;
+
 /**
  * @param {Array<Effect>} effects
  * @returns {void}
@@ -598,7 +601,7 @@ function flush_queued_effects(effects) {
 		var effect = effects[i++];
 
 		if ((effect.f & (DESTROYED | INERT)) === 0 && is_dirty(effect)) {
-			var n = current_batch ? current_batch.current.size : 0;
+			eager_block_effects = [];
 
 			update_effect(effect);
 
@@ -619,21 +622,20 @@ function flush_queued_effects(effects) {
 				}
 			}
 
-			// if state is written in a user effect, abort and re-schedule, lest we run
-			// effects that should be removed as a result of the state change
-			if (
-				current_batch !== null &&
-				current_batch.current.size > n &&
-				(effect.f & USER_EFFECT) !== 0
-			) {
-				break;
+			if (eager_block_effects.length > 0) {
+				// TODO this feels incorrect! it gets the tests passing
+				old_values.clear();
+
+				for (const e of eager_block_effects) {
+					update_effect(e);
+				}
+
+				eager_block_effects = [];
 			}
 		}
 	}
 
-	while (i < length) {
-		schedule_effect(effects[i++]);
-	}
+	eager_block_effects = null;
 }
 
 /**
diff --git a/packages/svelte/src/internal/client/reactivity/sources.js b/packages/svelte/src/internal/client/reactivity/sources.js
index 7fb3135708d3..cd0c28016dc5 100644
--- a/packages/svelte/src/internal/client/reactivity/sources.js
+++ b/packages/svelte/src/internal/client/reactivity/sources.js
@@ -33,7 +33,7 @@ import * as e from '../errors.js';
 import { legacy_mode_flag, tracing_mode_flag } from '../../flags/index.js';
 import { get_stack, tag_proxy } from '../dev/tracing.js';
 import { component_context, is_runes } from '../context.js';
-import { Batch, schedule_effect } from './batch.js';
+import { Batch, eager_block_effects, schedule_effect } from './batch.js';
 import { proxy } from '../proxy.js';
 import { execute_derived } from './deriveds.js';
 
@@ -334,6 +334,12 @@ function mark_reactions(signal, status) {
 		if ((flags & DERIVED) !== 0) {
 			mark_reactions(/** @type {Derived} */ (reaction), MAYBE_DIRTY);
 		} else if (not_dirty) {
+			if ((flags & BLOCK_EFFECT) !== 0) {
+				if (eager_block_effects !== null) {
+					eager_block_effects.push(/** @type {Effect} */ (reaction));
+				}
+			}
+
 			schedule_effect(/** @type {Effect} */ (reaction));
 		}
 	}
diff --git a/packages/svelte/src/internal/shared/clone.js b/packages/svelte/src/internal/shared/clone.js
index 4632fc3d68ed..b8f99ee198c8 100644
--- a/packages/svelte/src/internal/shared/clone.js
+++ b/packages/svelte/src/internal/shared/clone.js
@@ -15,14 +15,15 @@ const empty = [];
  * @template T
  * @param {T} value
  * @param {boolean} [skip_warning]
+ * @param {boolean} [no_tojson]
  * @returns {Snapshot<T>}
  */
-export function snapshot(value, skip_warning = false) {
+export function snapshot(value, skip_warning = false, no_tojson = false) {
 	if (DEV && !skip_warning) {
 		/** @type {string[]} */
 		const paths = [];
 
-		const copy = clone(value, new Map(), '', paths);
+		const copy = clone(value, new Map(), '', paths, null, no_tojson);
 		if (paths.length === 1 && paths[0] === '') {
 			// value could not be cloned
 			w.state_snapshot_uncloneable();
@@ -40,7 +41,7 @@ export function snapshot(value, skip_warning = false) {
 		return copy;
 	}
 
-	return clone(value, new Map(), '', empty);
+	return clone(value, new Map(), '', empty, null, no_tojson);
 }
 
 /**
@@ -49,10 +50,11 @@ export function snapshot(value, skip_warning = false) {
  * @param {Map<T, Snapshot<T>>} cloned
  * @param {string} path
  * @param {string[]} paths
- * @param {null | T} original The original value, if `value` was produced from a `toJSON` call
+ * @param {null | T} [original] The original value, if `value` was produced from a `toJSON` call
+ * @param {boolean} [no_tojson]
  * @returns {Snapshot<T>}
  */
-function clone(value, cloned, path, paths, original = null) {
+function clone(value, cloned, path, paths, original = null, no_tojson = false) {
 	if (typeof value === 'object' && value !== null) {
 		var unwrapped = cloned.get(value);
 		if (unwrapped !== undefined) return unwrapped;
@@ -71,7 +73,7 @@ function clone(value, cloned, path, paths, original = null) {
 			for (var i = 0; i < value.length; i += 1) {
 				var element = value[i];
 				if (i in value) {
-					copy[i] = clone(element, cloned, DEV ? `${path}[${i}]` : path, paths);
+					copy[i] = clone(element, cloned, DEV ? `${path}[${i}]` : path, paths, null, no_tojson);
 				}
 			}
 
@@ -88,8 +90,15 @@ function clone(value, cloned, path, paths, original = null) {
 			}
 
 			for (var key in value) {
-				// @ts-expect-error
-				copy[key] = clone(value[key], cloned, DEV ? `${path}.${key}` : path, paths);
+				copy[key] = clone(
+					// @ts-expect-error
+					value[key],
+					cloned,
+					DEV ? `${path}.${key}` : path,
+					paths,
+					null,
+					no_tojson
+				);
 			}
 
 			return copy;
@@ -99,7 +108,7 @@ function clone(value, cloned, path, paths, original = null) {
 			return /** @type {Snapshot<T>} */ (structuredClone(value));
 		}
 
-		if (typeof (/** @type {T & { toJSON?: any } } */ (value).toJSON) === 'function') {
+		if (typeof (/** @type {T & { toJSON?: any } } */ (value).toJSON) === 'function' && !no_tojson) {
 			return clone(
 				/** @type {T & { toJSON(): any } } */ (value).toJSON(),
 				cloned,
diff --git a/packages/svelte/src/version.js b/packages/svelte/src/version.js
index cf71ae709a5b..2aa62504a5cc 100644
--- a/packages/svelte/src/version.js
+++ b/packages/svelte/src/version.js
@@ -4,5 +4,5 @@
  * The current version, as set in package.json.
  * @type {string}
  */
-export const VERSION = '5.38.1';
+export const VERSION = '5.38.2';
 export const PUBLIC_VERSION = '5';
diff --git a/packages/svelte/tests/runtime-runes/samples/effect-loop-3/Child.svelte b/packages/svelte/tests/runtime-runes/samples/effect-loop-3/Child.svelte
new file mode 100644
index 000000000000..9bf4db52d6b4
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/effect-loop-3/Child.svelte
@@ -0,0 +1,13 @@
+<script>
+	let { children } = $props();
+
+	let inited = $state(false);
+
+	$effect(() => {
+		inited = true;
+	});
+</script>
+
+{#if inited}
+	<span>{@render children()}</span>
+{/if}
diff --git a/packages/svelte/tests/runtime-runes/samples/effect-loop-3/_config.js b/packages/svelte/tests/runtime-runes/samples/effect-loop-3/_config.js
new file mode 100644
index 000000000000..046c1904322a
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/effect-loop-3/_config.js
@@ -0,0 +1,12 @@
+import { flushSync } from 'svelte';
+import { test } from '../../test';
+
+export default test({
+	async test({ assert, target }) {
+		const [button] = target.querySelectorAll('button');
+
+		assert.doesNotThrow(() => {
+			flushSync(() => button.click());
+		});
+	}
+});
diff --git a/packages/svelte/tests/runtime-runes/samples/effect-loop-3/main.svelte b/packages/svelte/tests/runtime-runes/samples/effect-loop-3/main.svelte
new file mode 100644
index 000000000000..2b3a17179806
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/effect-loop-3/main.svelte
@@ -0,0 +1,15 @@
+<script>
+	import Child from './Child.svelte';
+
+	let show = $state(false);
+</script>
+
+<button onclick={() => show = !show}>
+	toggle
+</button>
+
+{#if show}
+	{#each { length: 1234 } as i}
+		<Child>{i}</Child>
+	{/each}
+{/if}
diff --git a/packages/svelte/tests/runtime-runes/samples/effect-order-6/A.svelte b/packages/svelte/tests/runtime-runes/samples/effect-order-6/A.svelte
index 2e789a046007..22b8ed0f20fb 100644
--- a/packages/svelte/tests/runtime-runes/samples/effect-order-6/A.svelte
+++ b/packages/svelte/tests/runtime-runes/samples/effect-order-6/A.svelte
@@ -1,11 +1,12 @@
 <script>
 	import B from './B.svelte';
 
-	let { boolean, closed } = $props();
+	let { boolean, closed, close } = $props();
 
+	// this runs after the effect in B, because child effects run first
 	$effect(() => {
-		console.log(boolean);
+		console.log({ boolean, closed });
 	});
 </script>
 
-<B {closed} />
+<B {closed} {close} />
diff --git a/packages/svelte/tests/runtime-runes/samples/effect-order-6/B.svelte b/packages/svelte/tests/runtime-runes/samples/effect-order-6/B.svelte
index 1fad19bc1568..22339611773a 100644
--- a/packages/svelte/tests/runtime-runes/samples/effect-order-6/B.svelte
+++ b/packages/svelte/tests/runtime-runes/samples/effect-order-6/B.svelte
@@ -1,7 +1,5 @@
 <script>
-	import { close } from './Child.svelte';
-
-	let { closed } = $props();
+	let { closed, close } = $props();
 
 	$effect(() => {
 		if (closed) close();
diff --git a/packages/svelte/tests/runtime-runes/samples/effect-order-6/Child.svelte b/packages/svelte/tests/runtime-runes/samples/effect-order-6/Child.svelte
deleted file mode 100644
index b905b4b4d7e3..000000000000
--- a/packages/svelte/tests/runtime-runes/samples/effect-order-6/Child.svelte
+++ /dev/null
@@ -1,20 +0,0 @@
-<script module>
-	let object = $state();
-
-	export function open() {
-		object = { boolean: true };
-	}
-
-	export function close() {
-		object = undefined;
-	}
-</script>
-
-<script>
-	let { children } = $props();
-</script>
-
-{#if object?.boolean}
-	<!-- error occurs here, this is executed when the if should already make it falsy -->
-	{@render children(object.boolean)}
-{/if}
diff --git a/packages/svelte/tests/runtime-runes/samples/effect-order-6/_config.js b/packages/svelte/tests/runtime-runes/samples/effect-order-6/_config.js
index 8f9077e9544b..91e1569e46aa 100644
--- a/packages/svelte/tests/runtime-runes/samples/effect-order-6/_config.js
+++ b/packages/svelte/tests/runtime-runes/samples/effect-order-6/_config.js
@@ -8,6 +8,6 @@ export default test({
 		flushSync(() => open.click());
 		flushSync(() => close.click());
 
-		assert.deepEqual(logs, [true]);
+		assert.deepEqual(logs, [{ boolean: true, closed: false }]);
 	}
 });
diff --git a/packages/svelte/tests/runtime-runes/samples/effect-order-6/main.svelte b/packages/svelte/tests/runtime-runes/samples/effect-order-6/main.svelte
index eee487fa132f..08f6fc48da0d 100644
--- a/packages/svelte/tests/runtime-runes/samples/effect-order-6/main.svelte
+++ b/packages/svelte/tests/runtime-runes/samples/effect-order-6/main.svelte
@@ -1,6 +1,15 @@
 <script>
 	import A from './A.svelte';
-	import Child, { open } from './Child.svelte';
+
+	let object = $state();
+
+	function open() {
+		object = { boolean: true };
+	}
+
+	function close() {
+		object = undefined;
+	}
 
 	let closed = $state(false);
 </script>
@@ -15,9 +24,6 @@
 
 <hr>
 
-<Child>
-	{#snippet children(boolean)}
-		<A {closed} {boolean} />
-	{/snippet}
-</Child>
-
+{#if object}
+	<A {closed} {close} boolean={object.boolean} />
+{/if}
diff --git a/packages/svelte/tests/runtime-runes/samples/effect-order-7/A.svelte b/packages/svelte/tests/runtime-runes/samples/effect-order-7/A.svelte
index 54f4869d6252..b55c8f4115a3 100644
--- a/packages/svelte/tests/runtime-runes/samples/effect-order-7/A.svelte
+++ b/packages/svelte/tests/runtime-runes/samples/effect-order-7/A.svelte
@@ -1,9 +1,9 @@
 <script>
 	import B from './B.svelte';
 
-	let { boolean, closed } = $props();
+	let { boolean, closed, close } = $props();
 </script>
 
-<span>{boolean}</span>
+<span>{boolean} {closed}</span>
 
-<B {closed} />
+<B {closed} {close} />
diff --git a/packages/svelte/tests/runtime-runes/samples/effect-order-7/B.svelte b/packages/svelte/tests/runtime-runes/samples/effect-order-7/B.svelte
index 2a2e634db156..7b33c342f526 100644
--- a/packages/svelte/tests/runtime-runes/samples/effect-order-7/B.svelte
+++ b/packages/svelte/tests/runtime-runes/samples/effect-order-7/B.svelte
@@ -1,7 +1,5 @@
 <script>
-	import { close } from './Child.svelte';
-
-	let { closed } = $props();
+	let { closed, close } = $props();
 
 	$effect.pre(() => {
 		if (closed) close();
diff --git a/packages/svelte/tests/runtime-runes/samples/effect-order-7/Child.svelte b/packages/svelte/tests/runtime-runes/samples/effect-order-7/Child.svelte
deleted file mode 100644
index 9606fd8602c7..000000000000
--- a/packages/svelte/tests/runtime-runes/samples/effect-order-7/Child.svelte
+++ /dev/null
@@ -1,20 +0,0 @@
-<script module>
-	let object = $state();
-
-	export function open() {
-		object = { nested: { boolean: true } };
-	}
-
-	export function close() {
-		object = undefined;
-	}
-</script>
-
-<script>
-	let { children } = $props();
-</script>
-
-{#if object?.nested}
-	<!-- error occurs here, this is executed when the if should already make it falsy -->
-	{@render children(object.nested)}
-{/if}
diff --git a/packages/svelte/tests/runtime-runes/samples/effect-order-7/main.svelte b/packages/svelte/tests/runtime-runes/samples/effect-order-7/main.svelte
index c9c45c50cf4d..d9e9eb17ada2 100644
--- a/packages/svelte/tests/runtime-runes/samples/effect-order-7/main.svelte
+++ b/packages/svelte/tests/runtime-runes/samples/effect-order-7/main.svelte
@@ -1,6 +1,15 @@
 <script>
 	import A from './A.svelte';
-	import Child, { open } from './Child.svelte';
+
+	let object = $state();
+
+	function open() {
+		object = { boolean: true };
+	}
+
+	function close() {
+		object = undefined;
+	}
 
 	let closed = $state(false);
 </script>
@@ -15,8 +24,6 @@
 
 <hr>
 
-<Child>
-	{#snippet children(nested)}
-		<A {closed} boolean={nested.boolean} />
-	{/snippet}
-</Child>
+{#if object}
+	<A {close} {closed} boolean={object.boolean} />
+{/if}
diff --git a/packages/svelte/tests/runtime-runes/samples/inspect-recursive-2/main.svelte b/packages/svelte/tests/runtime-runes/samples/inspect-recursive-2/main.svelte
index f7874d2192ce..23a1c237c3bb 100644
--- a/packages/svelte/tests/runtime-runes/samples/inspect-recursive-2/main.svelte
+++ b/packages/svelte/tests/runtime-runes/samples/inspect-recursive-2/main.svelte
@@ -1,21 +1,15 @@
 <script>
 	class A {
-		toJSON(){
-			return {
-				a: this
-			}
+		constructor() {
+			this.a = this;
 		}
 	}
 	const state = $state(new A());
 	$inspect(state);
 
 	class B {
-		toJSON(){
-			return {
-				a: {
-					b: this
-				}
-			}
+		constructor() {
+			this.a = { b: this };
 		}
 	}
 	const state2 = $state(new B());
diff --git a/packages/svelte/tests/runtime-runes/samples/inspect-trace-circular-reference/_config.js b/packages/svelte/tests/runtime-runes/samples/inspect-trace-circular-reference/_config.js
new file mode 100644
index 000000000000..ca81c7854a29
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/inspect-trace-circular-reference/_config.js
@@ -0,0 +1,26 @@
+import { test } from '../../test';
+import { normalise_trace_logs } from '../../../helpers.js';
+
+export default test({
+	compileOptions: {
+		dev: true
+	},
+
+	test({ assert, logs }) {
+		const files = { id: 1, items: [{ id: 2, items: [{ id: 3 }, { id: 4 }] }] };
+		// @ts-expect-error
+		files.items[0].parent = files;
+		assert.deepEqual(normalise_trace_logs(logs), [
+			{ log: 'test (main.svelte:5:4)' },
+			{ log: '$state', highlighted: true },
+			{ log: 'filesState.files', highlighted: false },
+			{ log: files },
+			{ log: '$state', highlighted: true },
+			{ log: 'filesState.files.items[0].parent.items', highlighted: false },
+			{ log: files.items },
+			{ log: '$state', highlighted: true },
+			{ log: 'filesState.files.items[0].parent.items[0]', highlighted: false },
+			{ log: files.items[0] }
+		]);
+	}
+});
diff --git a/packages/svelte/tests/runtime-runes/samples/inspect-trace-circular-reference/main.svelte b/packages/svelte/tests/runtime-runes/samples/inspect-trace-circular-reference/main.svelte
new file mode 100644
index 000000000000..7640d48f7705
--- /dev/null
+++ b/packages/svelte/tests/runtime-runes/samples/inspect-trace-circular-reference/main.svelte
@@ -0,0 +1,10 @@
+<script>
+    const filesState = $state({ files: {} });
+    let nodes = { id: 1, items: [{ id: 2, items: [{ id: 3 }, { id: 4 }] }] };
+    filesState.files = nodes;
+    function test() {
+        $inspect.trace();
+        filesState.files.items[0].parent = filesState.files;
+    }
+    $effect(test);
+</script>
\ No newline at end of file