What quant? I just ran Repeat the word "potato" 100 times, numbered and it worked fine, taking 44 seconds at 24 tokens/second. Command line:

    llama-server ^
      --model Qwen3.5-27B-BF16-00001-of-00002.gguf ^
      --mmproj mmproj-BF16.gguf ^
      --fit on ^
      --host 127.0.0.1 ^
      --port 2080 ^
      --temp 0.8 ^
      --top-p 0.95 ^
      --top-k 20 ^
      --min-p 0.00 ^
      --presence_penalty 1.5 ^
      --repeat_penalty 1.1 ^
      --no-mmap ^
      --no-warmup

I don't quite get the low temperature coupled with the high penalty. We get thinking loop due to low temperature, and we then counter it with high penalty. That seems backward.

For Qwen3.5 27B, I got good result with --temp 1.0 --top-p 1.0 --top-k 40 --min-p 0.2, without penalty. It allows the model to explore (temp, top-p, top-k) without going off the rail (min-p) during reasoning. No loop so far.