Validation fails with the message "a circular reference has been detected in the workflow"

Symptoms
We would like to have automatic transitions between two steps, based on the conditions below:
- from "In progress" to "Reviewed" when configurable field A is True
- from "Reviewed" to "In progress" when configurable field A is False

However, the workflow validation fails with the error message below.

How can we achieve having automatic transitions between two states?

Error/warning messages
"A circular reference has been detected in the workflow: In progress, Reviewed"

Reason
The message "A circular reference has been detected in the workflow" is displayed if a group of automatic transitions form a circular path. This behavior is by design; automatic transitions are not allowed to form a circular path regardless of the conditions listed, even if the conditions and values are configured to prevent a loop.

Workaround
The alternative is to remove one of the automatic transitions and redirect the workflow to the desired state inside a process, with the help of a decision step.

An additional state (IsFlagNo) is used for redirecting the flow back to Assigned state from In Service.

In this workflow, the request would automatically go from In Service to Assigned state, and from Assigned to In Service state only by modifying a UDF field (RequestCode80), as if there is a circular auto-transition between the two states.

Please note that the attached code sample "SampleWFSPLIT.sql" is provided as an example and is not supported.

SampleWFSPLIT.sql attached