I have a customer that is currently configured to use the same publically routable IP address with a static NAT translation and also in a PAT pool. I'm posting a short blurb of the output I'm seeing in the config. Does anyone know if this is possible and if so how it's working?
The router can nat out whatever addresses they want to as long as the remote side knows how to get back. In your scenario, they have natting configured to use the loopback interface. The interfaces configured for nat are the serial and inside interface.When the packet goes out, it will get natted to the loopback address instead of the serial interface.
In reality, they can nat out any address they wanted without having a loopback configured on the device.