The current implementation of katipAddContext leaks under recursion, this caused me a 5-ish day chase to finding the source of the leak (and a lot of stress).

As far as I can tell, it's not possible to change katipAddContext such that it doesn't leak without introducing a breaking change (which would be causing a lot of breakage).
But I think it's possible to add an alternative API that doesn't leak, at least.
For example:

-- | like `katipAddContext` but doesn't memory leak under recursion,
--   as long as log messages are emitted.
katipSetContext ::
  ( ToJSON context,
    KatipContext m
  ) =>
  Text -> -- ^ key
  context -> -- ^ value
  m a ->
  m a

I would realize this by changing the log context a bit:

newtype LogContexts = LogContexts { logContextsSetContexts :: (Map Text Value), logContextsAddedContexts  ::  (Seq AnyLogContext) } deriving (Monoid, Semigroup)

Then in the consumers of the log contexts, the setContext get prepended to the Seq AnyLogContext by translating each key value pair in logContextsSetContexts into a SimpleLogPayload.

The reason this doesn't leak under recursion is that the same key is overridden in the logContextsSetContexts field. And every time a log message get emitted, the content of contexts fields get forced due to "natural" serialization process. (so yes this may still leak if you don't ever emit a log message, but that's a degenerate case).

I think a disadvantage of this new api is that you lose the verbosity level mechanism, but I think this can be added back as well by introducing another settings field for example, just for this api.
That addition maybe a bit more powerful as well because no longer is verbosity attached to a type class but can be modified at runtime.

Would this be appreciated as a pull request? I'm asking first before doing the implementation because I suspect it'd be a fair bit of work.