Note that this is not enabled by default, although there is an upper bound on tree size which does limit the reach of the issue.

See https://lxml.de/FAQ.html#is-lxml-vulnerable-to-xml-bombs for more about the tuning knobs.

libxml2 segfaults on me whenever I give it vaguely complicated xsl templates so I'm doubtful about how effective that handling will be.

OK, so the defusedxml.lxml submodule is deprecated and one should use the other APIs from defusedxml instead. That does not mean that defusedxml in it's entirety would be useless.