Question: I have two SharePoint List and each of them have a workflow.  

Both list's workflow have the option 'start this workflow when a new item is created' ticked.   

Workflow in the 1st list may move item to 2nd list if it fulfill certain requirements. Same goes to 2nd list (Workflow in the 2nd list may also move item to 1st list if it fulfill certain requirements)

May I know if there could be a scenario whereby item are looping between two list? (In another way, is a item that is moved from another list consider a new item?)

Answer: 
It looks like this wasn't a UPS specific issue; one of the web front ends essentially bricked itself as part of the upgrade. Detaching it from the farm and re-adding it didn't solve the issue; we actually ended up rebuilding the box.
This is most likely due to a change in the service accounts. Is it possible that there was a manual change to the service accounts through IIS Manager that was reset to the configured account when the configuration manager was run after the service pack installation?

Please refer to [Spencer Harbar's User Profile Sync Guide](http://www.harbar.net/articles/sp2010ups.aspx) for the proper service account roles and permissions if you haven't already.