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Am adding the dict argument so that subclass dictionaries
are handled without extra coding.  See Objects/setobject.c 1.31

Sets were designed to be non-recursive.  While you can
create shennanigans to introduce hashable mutable objects to
be stored recursively, I have no interest in building
support for them.  Certainly, it is not worth introducing
other anomalies or worth compilcating the code.