while trying to reproduce some issue on a clean setup, found out an unexpected result.

create a discovery rule that discovers 127.0.0.1, create a discovery action that links to some template.

expected to see 'localhost' host created, but instead the template got linked to "Zabbix server" (the lowest hostid with 127.0.0.1)

there might be some localhost-specific logic here, but that doesn't match the manual :

When adding hosts, a host name is the result of reverse lookup or IP address if reverse lookup fails.

https://www.zabbix.com/documentation/3.0/manual/discovery/network_discovery