JQuery Garbage Collection - Will This Be Clean?

Many articles (e.g. msdn) have said that a circular reference cannot be cleaned up in some browsers when it involves a DOM object and a JS object.

(IE 6 can't do it at all and IE7 can only do it between page requests):

Javascript Native (Leaks):

function leak(){
    var elem = document.createElement("DIV");
    document.body.appendChild(elem);
    elem.onclick = function () {
        elem.innerHTML = elem.innerHTML + ".";
        // ...
    };
}

Because the element's onload property refers back to itself through a closure, it creates a circular reference:

elem [DOM] -> elem.onclick [JS] -> elem [DOM]

JQuery Version (Does NOT Leak):

function leak(){
    var elem = $('<div></div>');
    $(document.body).append(elem);
    elem.click(function () {
        elem.html(elem.html() + ".");
        // ...
    };
}

In this case, jQuery stops the leak from happening in ALL browsers concerned even though there is still a circular reference:

elem [JS] -> element [DOM] -> elem.onclick [JS] -> elem [JS]

My Question: How does jQuery stop the leak if there is still a circular reference?