You are correct XSUB.h in the CORE files is what's redefining free() to PerlMem_free and the memory isn't getting released.

Still trying to figure out how to keep that from happening.

see Re: Perl with Swig C module not releasing memory

In reply to Re^5: Perl with Swig C module not releasing memory by bulk88
in thread [Solved] Perl with Swig C module not releasing memory by megaframe

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