Well, what happens to the additives (such as zinc/manganese, essential to the durability of flat tappet engines) in the oil that are naturally consumed during the process of normal combustion (and which deteriorate over time)?
It's fine to filter and re-filter the oil in an endless closed loop. Recyclers do this to recover even the most contaminated used oil, which can then be re-used.
But fresh additives are always added.
That's the part I'm dubious about.