How to stop a recursive setTimeout with an API call?

I have a NextJS application that runs a recursive setTimeout when the server is started. I need to create an API endpoint that can start and stop this loop (to have more control over it in production). This loop is used to process items in a database that are added from another API endpoint.

  import { clearTimeout } from "timers";

  var loopFlag = true;

  export function loopFlagSwitch(flag: boolean) {
    loopFlag = flag;
  }

  export async function loop() {
    
    try {
      // Retrieve all unprocessed transactions
      const unprocessedTransactions = await prisma.transaction.findMany({
        take: 100,
        where: { status: "UNPROCESSED" },
      });

      // Loop through transactions and do stuff
      for (const transaction of unprocessedTransactions) {
        //stuff
      }
    } catch (e) {
      // handle error
    }

    if (loopFlag === true) { 
      setTimeout(loop, 1000);  //if flag changes, this will stop running
    }
  }

  if (require.main === module) {
    loop(); // This is called when server starts, but not when file is imported
  }

The reason I use setTimeout and not setInterval is because many errors can occur when processing items retrieved from DB. These errors, however, are solved by waiting a few milliseconds. So, the benefit of the pattern below is that if an error happens, the loop immediately restarts and the error will not appear because a ms has passed (it's due to concurrency problems -- let's ignore this for now).

To attempt to start and stop this loop, I have an endpoint that simply calls the loopFlagSwitch function.

import { NextApiRequest, NextApiResponse } from "next";
import { loopFlagSwitch } from "services/loop";

async function handler(req: NextApiRequest, res: NextApiResponse) {
  try {
    loopFlagSwitch(req.body.flag);
  } catch (error) {
    logger.info({ error: error });
  }
}

export default handler;

Problem is, even when this endpoint is called, the setTimeout loop keeps going. Why isn't it picking the change in flag?

from How to stop a recursive setTimeout with an API call?