I couldn't answer
Perhaps reading http://www.newlisp.org/ExpressionEvaluation.html helps understanding the http://www.newlisp.org/MemoryManagement.html paper better. Regarding circular references: they do not exist in newLISP, there is no way to create them. The performance question is addressed in a sub chapter of that memory management paper and here: http://www.newlisp.org/benchmarks/
May be working and experimenting with newLISP - i.e. trying to create a circular reference - will clear up most of the questions.