What is Wrong with this script?

As M39a9m3R said, the code updates itself into a continuous loop.

I'm going to suggest a Debounce because I know no other way, but I'm sure there are more.

A debounce is a variable used to stop code from running multiple times in a row. To add a debounce would make your code look somewhat like this,

local v = game.Players.LocalPlayer
local Debounce = false
if v.Name == "Player1" or game:GetService("MarketplaceService"):PlayerOwnsAsset(v,440723046)==true then
    if v:FindFirstChild('leaderstats') then
            if v.leaderstats:FindFirstChild('XP') then
                v.leaderstats.XP.Changed:connect(function(z)
                    if Debounce then return end
                    Debounce = true
                    v.leaderstats.XP.Value = v.leaderstats.XP.Value + 25 * workspace.Scripts.Multiplier.Value
                    wait(1)--Shouldn't have to wait long
                    Debounce = false
                end)
            end
    end
end

Wait time could possible be shortened, or may need to be longer.

That was a short was of, hopefully, fixing your code.

I hope I helped.

Good Luck.

If I did help, don't forget to accept my answer.