Yes, but modern DI (like Dagger for Java) can detect cyclic dependencies at compile time and break the build.
Honestly, in practice it worked and wasn't too bad to work with, which was interesting to behold - in practice everyone talks about how circular dependencies are bad for a variety or reasons (trying to print or process data and ending up with endless loops comes to mind), but then there just was that system that was chugging along without a care in the world.
The compiler generally has better attention to detail and the ability to deal with larger object graphs than the typical human.