recursiveVars.json

{
    "$schema": "https://schema.management.azure.com/schemas/2019-04-01/deploymentTemplate.json#",
    "contentVersion": "1.0.0.0",
    "parameters": {
        /* InvalidTemplate - Deployment template validation failed: 'The template resource 'p1' at line '5' and column '15' is not valid: The template function 'variables' is not expected at this location. Please see https://aka.ms/arm-template-expressions for usage details.. Please see https://aka.ms/arm-template-expressions for usage details.'.
        "p1": {
            "type": "string",
            "metadata": {
                "description": "description"
            },
            "defaultValue": "[variables('v2')]"
        }*/
    },
    "functions": [],
    "variables": {
        // This is fine:
        "v2": "[concat(variables('v1'), 'and v2')]",
        "v1": "v1"

        // InvalidTemplate - Deployment template validation failed: 'The template variable 'v2' is not valid: Circular dependency detected in template language expression: 'v2'. Please see https://aka.ms/arm-template-expressions for usage details.. Please see https://aka.ms/arm-template-expressions for usage details.'.
        // "v2": "[concat(variables('v1'), 'and v2')]",
        // "v1": "[concat(variables('v2'), 'and v1')]"
    },
    "resources": [],
    "outputs": {
        "output1": {
            "type": "string",
            "value": "[variables('v2')]"
        }
    }
}