If the state of the interface is Loopback, add a Type 3 link (stub network) as long as this is not an interface to an unnumbered point-to-point network. The Link ID should be set to the IP interface address, the Link Data set to the mask 0xffffffff (indicating a host route), and the cost set to 0.
Essentially, because it's a "virtual interface." In fact, with Cisco IOS, you can put the command "ip ospf network-type point-to-point" under the loopback interface, and it will be advertised as with the mask you have configured.
Russ.W
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