Using ALTER TABLE with the SET INCREMENT BY or SET RESTART WITH
options to make a change to a GENERATED ... BY IDENTITY column resets the CYCLE option of that column to "off".
Some test cases demonstrating this behavior were added as part of
DERBY-6852 change revision 1756287
The problem occurs when the ALTER TABLE code drops and recreates
the underlying SEQUENCE object, and does not preserve the CYCLE
option of the underlying SEQUENCE object.
I believe the correct behavior would be for the ALTER TABLE code
to read the current CYCLE option of the underlying SEQUENCE object
first, and then create the new SEQUENCE object with the same value
for the CYCLE option.