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As far as I can tell pretty conclusive results:

If someone can explain this or has a fix for it I'd love to hear it!

You shouldn't expect a database system to release memory back to the OS just because it's no longer needed for some specific purpose.

DuckDB has a memory_limit setting with a default of 80% of RAM. If you want to set a lower limit you can do something like

SET memory_limit = '1GB';