As said in the title, the Infinite Transmutation Loop is a theoretical process, only achievable during holidays that allow you to obtain items from performing tasks such as collecting finished brews from Baldwin.
How is it achievable? You insert something you gained from your holiday drops into Baldwin's Bubbling Brew, and melt it down into a transmutation ingredient. When you go to collect your ingredient, you will, hopefully, obtain another holiday item while gathering the brew. You will take this item and throw it into the cauldron.
In theory, if you consistently obtained new drops along with your collected transmutation ingredient, Baldwin's Bubbling Brew creates a self-sustaining process of melting down items into transmutation ingredients, while also providing you the items that you need to melt.
Hence, the Infinite Transmutation Loop.
(Only lasting while the holiday is in effect)
How is it achievable? You insert something you gained from your holiday drops into Baldwin's Bubbling Brew, and melt it down into a transmutation ingredient. When you go to collect your ingredient, you will, hopefully, obtain another holiday item while gathering the brew. You will take this item and throw it into the cauldron.
In theory, if you consistently obtained new drops along with your collected transmutation ingredient, Baldwin's Bubbling Brew creates a self-sustaining process of melting down items into transmutation ingredients, while also providing you the items that you need to melt.
Hence, the Infinite Transmutation Loop.
(Only lasting while the holiday is in effect)
Tobias | He/Him | 
