Is it possible for MySQL v5.7.6 to to implement mesh replication with multi-source replication
It's called Galera.

A write to any node is automatically replicated to all other nodes.

Galera is usually deployed in 3-node configuration, but 4 is possible.

It is available from Percona (PXC), MariaDB, or an addon to MySQL.

Please explain why you want that configuration.

And, no, Galera won't get into an infinite loop.  Nor will any other multi-master setup -- as long as you set server-id to different values on each Master.