I projected a circle and suddenly I get a circle with dots in sketchmode. How did this happen and how do I get rid of the circles infection.

If I delete the dots I get this:

which looks fine until I draw a tangent and I get back to the first picture.

Did you project from an imported object? If so, it’s possible the object defined the circle as a polygon.

Yes I did. Is this a bug?

If it’s not a perfect circle originally, or the plane you project to isn’t perfectly perpendicular to it, it becomes essentially an ellipse, made from many splines, to be as accurate as possible.

It’s not a bug, that’s the intended behaviour.