The way it works in code

- take 1st point and measure distance between each point in a list
- sort those points by distance value
- when sorting first closest distance is zero because there is point itself in that list, so you take second
- repeat the this procedure for the rest of points:

2nd point search in full collection of points

3rd point search in full collection of points

4th point search in full collection of points

And so on…

I do not know why you would like to use cross reference.

Because you just need to search closest point per each point with full collection of points n times when n is a list length of all points

So the data tree looks like this

1st branch

1st point

2nd branch

2nd point

…

N branch

N point

And second data tree

1st branch

All points

2nd branch

All points

…

N branch

All points

You do not notice that all points are n times duplicated, but inside component the whole procedure is rerun n times