x.x.x.0/24 routerb------------routera x.x.x.x/32
Since each of these routes has a different prefix length (subnet mask), they're considered different destinations, and they will both be installed in the routing table. Longer prefixes are always preferred over shorter ones when forwarding a packet. If they had the same mask (seen as same destination), the router would forward packets to the directed connected interface as it would have a admin distance of 0, compared to 1 for static routes. But when routerB receives a packet for x.x.x.x, it will forward it to routerA, as the routes have a different mask. I tested this before and it works.
You are lucky it's a loopback because if it were an interface, packets on that interface destinated for that host IP wouldn't get there - ANDing process would see the IP as on the local subnet and wouldn't send it to the default gateway, would arp for it (assuming proxy-arp is off).
Steve