Russian doll of chests in creative crashes / lags client + server

Users can create "russian dolls" of complex nested NBT tags which then cause players to be unable to join the server. The most notable example of this is creating a chest full of chests full of chests full of chests full of chests using the creative mode pick block button.

To reproduce, put a chest inside a chest, ctrl + pick block, place that chest and then put it inside, wash, rinse, and repeat. After about 20 chests on single player my client suddenly got very laggy and crashed.