DB Engine :: Infinite Recursive Trigger

I have a after update trigger that calculates one of the columns based on other column values. It has to be a trigger and only fires an update statement against the table itself when the column has changed.  At a simple level it is doing something similar to the code below

IF UPDATE(Col1)
update MyTable SET Col2 = Col1 WHERE Col2 <> Col1

It works everywhere except on one site where the trigger causes itself to recurse until it reaches the 32 level error. It can be fixed by checking whether there and any records in the inserted table at the top. Like so.

IF EXISTS (SELECT * FROM inserted)
begin
IF UPDATE(Col1)
update MyTable SET Col2 = Col1 WHERE Col2 <> Col1
end

However, I would like to know whether there is some system setting other than "nested triggers" that I am missing that would cause the behaviour.