I'm the DM of a campaign in 5e DnD that's been running for about 3 years now, and it's pretty close to coming to an end. By now, I have very high level adventurers, and one of them is a high enough level to cast Simulacrum. Generally, I don't like outright saying "no, it is impossible to do X" - especially things that by the book SHOULD work. I always try to find ways to put player's creativity towards outlets where they can still feel powerful and strong without utterly destroying the game. But this is a loophole that I thought would destroy the world and the campaign if he was able to do it infinitely.
RAW as far as I'm aware, nothing stops Simulacrums from casting Simulacrum (and I couldn't find any refusal of this from Sage Advice or anything), so it sort of sucks to just outright say no to. Basically, the normal way I would normally handle this would simply be restricting access to the amounts of Ruby Dust available to the player, meaning they could have a few (maybe one to three versions of himself basically), but in this case, the player has access to an immense amount of gemstones and wealth at this point. Given time, he would eventually be able to find the rubies to cast it many times if he so wanted to.
I couldn't really in good faith restrict the materials because of this, so I tried to explain why this would break the world balance wise and an in universe explanation of how Simulacrums aren't an individual entity themselves, so they lack the capacity to replicate something that doesn't really exist as an independent being.
He tried to get around this by just making Simulacrum scrolls, until we looked at the time to create scrolls of 7th level and Mordenkainen's rules suggesting it would be 16 weeks and 25000 gold each (which is prohibitive to even him). He was pretty annoyed that I outright shut it down, and I'm sort of left questioning whether or now I'm being justified in outright banning them from creating more copies of them. Any thoughts from players or other GM's?
TLDR; A player with basically unlimited materials wasn't happy I told him he couldn't use Simulacrums to make more Simulacrums. I know RAW it works, but I figured it would break the game if he could. I was curious what other people thought about the ruling.
EDIT: Whoops, the spell scroll ruling was in Xanathar's, not Mordenkainen's. Whoops.
EDIT 2: A few people don't seem to understand how the exploit works. They're not limited to 4 and materials don't work as a limit because of how it's done. The first simulacrum is a construct that is created normally - meaning it doesn't have a 7th level slot, but it DOES have a 9th level slot. It then uses wish to cast Simulacrum on the Caster (who is a humanoid), NOT the Simulacrum (who is a construct). This makes it free after the first one. And this process loops infinitely, with each new Simulacrum making a new one - so you have unlimited 17th level wizards with half of the original's HP and missing one 7th level and one 9th level slot.