I traced that behavior to host_to_ipaddr function in libxtables/xtables.c

"--source <hostname>" will match all the IP addresses of hostname.
Same thing for --destination

The problem is that gethostbyname("localhost") returns two results: 127.0.0.1 
and 127.0.0.1 (yes, the same thing).

So this might be a bug in libc

--source localhost --destination localhost wrongly yields 2x2 = 4 combination 
of addresses

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