I have this weird identity between power series. It's kind of like the relation between a geometric series and $\frac{1}{1-x}$. I was wondering if there was some theory developed along these lines I could read up on.
Consider $$F(x) = (1+x^{1/2})(1+x^{1/4})\cdots$$ then $$F(x^2) = (1+x)F(x)$$ so $$\frac{F(x^2)}{1+x} = F(x)$$
and finally, $$F(x) = \frac{1}{1+x}\frac{1}{1+x^2}\frac{1}{1+x^4}\cdots = 1-x.$$
The main thing I'm having trouble wrapping my head around is where all the fractional powers "go"? In an expression like: $$(1+x)(1+x^2)\cdots = 1+ x + x^2 + \ldots = \frac{1}{1-x}$$ everything still makes sense to me, all the powers still appear. But in the above expression you're summing $x$ to the power of all dyadic rationals and somehow getting a $-x$ term.
Edit: I think I have a formulation where this makes sense. As a Hahn-series where formal infinite products are defined analogously. The support will be well-ordered as we are only taking finite sums. But this would mean that Hahn series are not unique, the same Hahn series can have two different representations. Either I'm still making some sort of mistake or the above is true.
If you start with $F(x)=1-x= (1-x^{1/2^k}) \prod_{n=1}^k (1+x^{1/2^n})$ then yes everything is fine in $\bigcup_{n\ge 1}\Bbb{C}[[x^{1/2^n}]]$, but you can't let $k\to \infty$ as you did, ie. $\lim_{k\to \infty} \prod_{n=1}^k (1+x^{1/2^n})$ doesn't converge in any topological integral domain where $x\ne 0$
(except in $\overline{\Bbb{F}}_2$ with the discrete topology and $x=1$ which gives $F=0=1-x$ by the way)