Indirect spec references often result in this exception. There are a couple of workarounds:
Defining :entity/ref with a single-clause s/and:
(s/def :entity/ref (s/and ::another-entity))
Or registering it with s/register and s/get-spec
(s/register :entity/ref (s/get-spec ::another-entity))
In any case, this is probably not the intended behavior.