vector() does not create VECTORs, it simply uses one of 64 pre-allocated VECTORs. I assume it works approximately as follows:

VECTOR _vector[64];
var _vector_current = 0;

VECTOR* vector(var x, var y, var z)
{
_vector_current = (_vector_current+1)%64;
_vector[_vector_current].x = x;
_vector[_vector_current].y = y;
_vector[_vector_current].z = z;
return &_vector[_vector_current];
}