|= still holds on to a reference on the value to be modified

[nicowilliams]

def _modify(paths; update):
    reduce path(paths) as $p ([., []];
        . as $dot
      | null
      | label $out
      | ($dot[0] | getpath($p)) as $v
      | (
          (   $$$$v   # <----- here we let go of $v, but $dot[0] at $p still has the same value
            | update
            | (., break $out) as $v
            | $$$$dot
            | setpath([0] + $p; $v)
          ),
          (
              $$$$dot
            | setpath([1, (.[1] | length)]; $p)
          )
        )
    ) | . as $dot | $dot[0] | delpaths($dot[1]);

We should setpath([0] + $p; null) before the $$$$v | update.

EDIT: This is by code inspection. I haven't tested this.