I’m unclear what is actually retried.  You use this note throughout the document, so I think it would help to clarify exactly what is retried and why that solves the particular problem.  I’m confused because, is it the refcount increment that’s retried or the entire sequence of steps (i.e. do you go back and reload the address of the item)?  Is there some kind of waiting period before the retry?  I would infer that if you’re retrying the refcount incrementing, it’s because you expect subsequent retries to transition from zero to non-zero, but is that guaranteed?  Are there possibilities of deadlocks or race conditions?

The entire operation is retried (not just the refcount). For "dict", this means going back to step 1 and reloading the version tag and PyDictKeysObject. The operation can fail (and need to be retried) only when some other thread is concurrently modifying the dict. The reader needs to perform the checks (and retry) to avoid returning inconsistent data, such as an object that was never in the dict. With the checks and retry, returning inconsistent or garbage data is not possible.

The retry is performed after locking the dict, so the operation is retried at most once -- the read operation can't fail when it holds the dict's lock because the lock prevents concurrent modifications. It would have also been possible to retry the operation in a loop without locking the dict, but I was concerned about reader starvation. (In the doc I wrote "livelock", but "reader starvation" is more accurate.) In particular, I was concerned that a thread repeatedly modifying a dict might prevent other threads reading the dict from making progress. I hadn't seen this in practice, but I'm aware that reader starvation can be an issue for similar designs like Linux's seqlock. Acquiring the dict's lock when retrying avoids the reader starvation issue.

Deadlock isn't possible because the code does not acquire any other locks while holding the dict's lock. For example, the code releases the dict's lock before calling Py_DECREF or PyObject_RichCompareBool.

The race condition question is a bit harder to answer precisely. Concurrent reads and modifications of a dict won't cause the program to segfault, return garbage data, or items that were never in the dict.