This small example causes a stack overflow, but shouldn't:

let rec loop r = seq {
    if r > 0 then
        let rec unused() = unused()
        yield r
        yield! loop r
}

printfn "%i" (Seq.nth 10000000 (loop 1))

Removing the conditional or replacing the unused recursive definition with an unused non-recursive definition both appear to result in the expected behavior of constant stack space usage.