I have done this exact thing in CL before. What you do is have your event loop function just be a loop calling another function, where all the event handling actually happens. When the event handler function is recompiled, the new version will run /the next time the function is called./

If the recompiled function is currently running that stack frame and anything deeper won't be affected for that call.

The only thing you can't do is redefine the loop function itself since it never stops running. That's why you factor it so there's no reason to change that function, just the functions it repeatedly calls.

Hope that explanation made sense.

Edit: And yes, the way this is implemented under the hood is that the repl has its own thread. You could do this even in C. In fact people have done this for the Linux kernel for example(at least for binary patches). The great thing in CL is the language is designed with the functionality in mind, and the dev tools just support it, so you get it for free.