Almost all the simple 8051 programs I have seen so far ends with the code
LOOP: SJMP LOOP.
From my understanding I think the above instruction creates an infinite loop by calling the same instruction again and again. But what is the purpose of having infinite loop at the end of a program and if it keeps running again and again then when does the program gets terminated.
How else do you "terminate" or end a bare metal program? There generally is no halt or other command, the processor doesnt stop. The safest/cleanest is to have it infinite loop (as opposed to just wandering through memory trying to execute what it finds).
so for simple educational processor/microcontroller programs, programs that "end", you would want to end them in an infinite loop if the processor doesnt have a halt. Most mcus never halt they run whatever forever (they might go to sleep in a low power state, but then wake up when you press a button on the remote or whatever).