Sheet binded item doesn't deinitialize SwiftUI

Question

Have the following scenario. Basically I want to use the item binded sheet init and bind it to an optional property which will be set when we want to show the sheet. On the outside it looks perfectly normal but something interesting I am noticing is that the item property isn't getting deinitialized, which leads to a retain cycle, here is a sample:

class Item: Identifiable {
    var dismiss: () -> Void

    init(dismiss: @escaping () -> Void) {
        self.dismiss = dismiss
        print("init >> item \(Unmanaged.passUnretained(self).toOpaque())")
    }

    deinit {
        print("deinit >> item \(Unmanaged.passUnretained(self).toOpaque())")
    }

    func start() -> some View {
        ViewTwo(dismiss: dismiss)
    }
}

struct ContentView: View {
    @State private var item: Item? {
        didSet {
            print(item)
        }
    }

    var body: some View {
        Button("Show") {
            item = Item {
                item = nil
            }
        }
        .sheet(item: $item) { item in
            item.start()
        }
    }
}

struct ViewTwo: View {
    var dismiss: () -> Void

    var body: some View {
        VStack {
            Button("Dismiss") {
                dismiss()
            }
        }
    }
}