This isn't a bug but how it works. Each create_function() call creates a new unique function. So obviously if you define zillions in an infinite loop you'll run out of memory.

It's been said that this is just how the function works, 
but it seems as though destroying allocations for an 
anonymous function when redefining to the same variable 
would be the way to handle it.  Example:

for ($i=0; $i<10; $i++) {
        $echoit = create_function('$wha', 'echo $wha;');
        echo memory_get_usage();
        $echoit(" on iteration: #$i\n");
}

How else can you dynamically modify function or code 
without reloading a script?

create_function() is operating as it should, yes, but there is still no way to delete a function during the execution of a script. for silly things like irc bots it gets handy to be able to rehash your function set on the fly, which is possible, but you lose track of the functions you have created thus far when you redefine your array of hashes.

i suggest a delete_function($foo) that removes the created function from memory and renders the hash in $foo useless.

another useful one would be redefine_function(&$foo, create_function(...)) that shortcuts the delete/create step for us.

this comes in handy for silly things like irc bots, when you have a large set of functions to be rehashed without losing your connection to the server by terminating the script.