There's really no point in checking for destinations called "localhost" because
there is nothing stopping people creating other DNS entries which point to
127.0.0.1. The right fix for this is
https://github.com/matrix-org/synapse/issues/3953.
Blocking localhost, on the other hand, means that you get a surprise when
trying to connect a test server on localhost to an existing server (with a
'normal' server_name).