‘The ".localhost" TLD has traditionally been statically defined in host DNS implementations as having an A record pointing to the loop back IP address and is reserved for such use. Any other use would conflict with widely deployed code which assumes this use.’
Reading that sentence implies a single loop back address. I appreciate that IPv6 “fixed” this confusion by having a single loop back address of ::1. While you are correct that IPv4 reserved the entire /8 in practice the expectation is generally that 127.0.0.1 is the loopback address, and using other addresses in the 127/8 space tends to lead to unexpected issues across many pieces of software. The intention of the .localhost domain is to ensure that DNS resolutions never resolves to something external, for security reasons.
Reading that sentence implies a single loop back address. I appreciate that IPv6 “fixed” this confusion by having a single loop back address of ::1. While you are correct that IPv4 reserved the entire /8 in practice the expectation is generally that 127.0.0.1 is the loopback address, and using other addresses in the 127/8 space tends to lead to unexpected issues across many pieces of software. The intention of the .localhost domain is to ensure that DNS resolutions never resolves to something external, for security reasons.
See also, RFC 5735: “… This is ordinarily implemented using only 127.0.0.1/32 for loopback.” — https://datatracker.ietf.org/doc/html/rfc5735