The problem is that with 1.0 syntax
is converted to 2.0 syntax and then parsed. So if there is html in it it generate html macro with the html content it it.
Problem is that when html macro is executed it tries to parse the content with the source proided to the TransformationManager which here is xwiki/1.0 and then re-do the same thing (convertt from 1.0 to 2.0 and generate html macro since the content has html, parse it, execute html macro, etc.) which produce an infinite loop.