I didn't see any rule that said that anyone the "trusted circle recommends" ends up being in such trust circle, so I don't see how they could be in a position to exponentially multiply.
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It doesn't matter. You are putting someone in trusted circle using some heuristics. Most trust relationships eventually forms delegation chain (A trusts B, B trusts C, ...). All such chain degrades exponentially by some factor, however small it may be. This is why organizations with deep management hierarchies are so dysfunctional and inefficient.