Good catch! Can you provide an example to reproduce this?

I'm afraid I can hardly justify the time to contrive a working server-client example for a one-liner. I'm happy to jump on a call and show you, it shouldn't take more than 10 minutes.

No problem; I can try to do it myself on top of our existing test code. I mostly just want you to clarify the scenario here.
If I have an entity class that references the same class, like this:

class Employee {
    public int Id { get; set; }
    public int ManagerId  { get; set; }
    public Employee Manager  { get; set; }
}

Does the error happen for all Employee-Manager relationships, or only when the Manager is the same entity as the employee and ManagerId == Id ?

Yeah it only happens when the entity references itself, so ManagerId == Id.

(Interestingly it does not happen when using EF 4.8 on the server, only for EF Core. The code in materialization/shaper.cs finds the existing object correctly in ObjectStateManager on line 188 in EF 4.8; I was not able to debug into EF Core in enough detail to uncover the problem, so I didn't report to them.)

If it's a bug in EF Core, we are lucky that the fix is so easy in the Breeze client.