Soft links

Soft links, also known as symbolic links, are based on name, not on inode number. Symbolic links are actually themselves special files. Like directories, they have a particular format and are understood and maintained by the filesystem.

A symbolic link, just contains the name of the file to which it points. So in this scheme, with many soft links pointing to the same file. There is a 'real' name and a 'real' location. The symbolic links are a method of indirection---hard links are direct.

Features:

• Works even when file info embedded in directory.
• Works across filesystems, as long as the target file can be identified by name
• Path name in link can be any valid path name: relative, absolute, even to a file on another filesystem
• The underlying file may be changed, and the link always points to the newest version

Also, soft links are slower. When a client tries to open a file which is actually a soft link. The soft link file must be read, then the link followed to open the actual file. This could itself be a link (must be careful to avoid infinite loops).
 
Again, backup software must be aware of soft links and treat them specially: it can't 'OPEN' the soft link file normally (since that would dereference the link), but actually read the link destination, and store that.

UNIX does not restrict the use of soft linking of directories, so you can create cycles to your heart's content using soft links.