But it does have fixpoints... right? You need recursion somehow.

In Standard ML, all recursive value definitions must have function literals as their right-hand sides. Thus, at runtime, recursion is guaranteed to go through functions (which normally aren't allocated in the heap) and/or mutable data structures (which can be handled in a special way by the garbage collector). Immutable data structures are generally guaranteed to be cycle-free.

That being said, reference counting is a really bad fit for functional languages for several other reasons.

You don't need the type of fixed points that cause the issues with circular pointers. Recursion can be done with (appropriately for HN) the Y combinator. The kind of tricks I'm talking about rely on laziness and are pretty complicated. See: http://stackoverflow.com/questions/37366222/why-is-this-vers...