Indeed you are correct, that when such a large local data is bound to the TreeView, a "Maximum call stack size exceeded" error is thrown by the HierarchicalDataSource. I have logged this as a bug in the Kendo UI GitHub repository. You can start tracking the progress that we make on it from issue #4268
For the time being, I would recommend you to turn on the loadOnDemand option
to true which will eliminate the error. Here is an updated Dojo example
Also, as a small token of gratitude for helping us discover this discrepancy, I have updated your Telerik points accordingly. You can find additional information in your Telerik Profile.