Docker Engine classifies a registry hostname as insecure using an any-match DNS check. loadInsecureRegistries() injects 127.0.0.0/8 and ::1/128 as insecure CIDRs by default. isCIDRMatch resolves all of the hostname's addresses and returns true if a single address is in the insecure CIDR list. Because the transport re-dials the hostname rather than the CIDR-matching address, a DNS answer set of one loopback IP plus a non-loopback attacker IP disables certificate verification and enables HTTP fallback for the registry connection.
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