The restoration loop math doesn't actually break - you're just hitting the point where the returns get so logarithmic that they feel broken. The enchanting / alchemy scaling is exponential early on, then flattens hard once you're past a certain threshold.
Here's what's probably happening: you've got the perks that boost potion potency (the alchemy tree one that increases all potion effects), and you're using those to bump enchanting power, which then loops back. But there's no hard cap per se - it's just that by level 52, even if your potions are 2x stronger than they were at level 40, your gear was already so ridiculously good that the difference between +40% and +80% enchantment strength starts to feel invisible in actual combat.
Make sure you've got the perk in the alchemy tree that makes potions more powerful (not just the one for specific schools). If you're missing that, yeah, the loop dies. Also double-check you're actually re-enchanting your gear after you brew the next batch of potions - I've definitely had brainfarts where I made stronger potions and forgot to actually use them on my armor.
Daedric to Ebony isn't special mechanically though. You might just be noticing the gear progression itself slows down because the smithing perk jumps get smaller at that tier. What difficulty are you on? If you're not struggling to kill stuff, the loop "working" is kind of moot anyway.
