I've been reviewing close votes and found this question (let's call it Question 1):

But its proposed duplicate (Question 2) is already marked as a duplicate of Question 1.

Still, I've been able to select Question 2 as a duplicate and click Vote to Close. That's when the circular duplicate has been detected and prevented.

I guess what happened here was:

1. Someone voted to close Q1 as a duplicate before Q2 was marked as a duplicate.
2. Daniel Beck has marked Q2 as a duplicate of Q1.
3. I've been asked if Q1 is a duplicate of Q2, but prevented from voting.

Note that Q2's doesn't need to be closed by a moderator, same thing happens when first close vote for Q2 is cast after Q1's first one, but more users vote for Q2.

The system worked at last, but it's not intuitive. I think that when Q2 has been marked as a duplicate, it should be immediately removed from Q1's proposed duplicates. This could prevent some confusion among reviewers.