novalis comments on Intelligence explosion in organizations, or why I'm not worried about the singularity - Less Wrong
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Are you saying that most software companies have code which modifies code (no, CPP, M4, and Spring don't count), or code which modifies humans? Because that has not been my experience in the software industry.
Examples of automation in the software industry are refactoring, compilation and unit testing. The entire industry involves getting machines to do things - so humans don't have to.
Automation is not the same as recursive self-modification. There's no loop.
The context is GIT improving GIT - where "GIT" refers to all the humans and machines involved in making GIT.
So: there's your loop, right there.