-> This assumes that the client did not apply the same hack you did.
:) Exactly!
They wouldn't do it on the same machine or system. I control my internal system. It's an embedded system which means I have complete control. If they applied it somewhere else on the network, I wouldn't receive any of those packets because the router would drop it and my patch drops the 127.xxx rcv'd packets if not received on the proper VLAN and my system doesn't accept tagged packets from the outside world.
I don't think I'm the only one who has done this. As a matter of fact, I KNOW I'm not. When I worked on BSD years ago (10+), I worked for a company who did the same sort of hack.
I think that the best way is to choose a 10.0.0.0/24|16|8 net and let the client to configure other net if it has the same net somewhere.
I agree that 127 is a lot less used that 10, but you never know.
Probably you will choose anyway 127, but I suggest to have a possibility the user choose another class if he wants.
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