This is a pretty interesting screenshot I took showing what can happen with a VNC loopback. I have setup VNC tunneling over ssh to connect to my pc from my work. I also use the Cisco VPN client to connect to my work. I then use Remote Desktop to get to my work pc. Two different methods to do the same thing in different directions, right. Now I have to use the cisco method to get to my work from a virtual machine I have setup on Virtual Server, because of a driver problem with Windows XP 64-bit. So I have connected to my work here, then I connected back to my pc from work.
As you can see it started opening tons of VNC connections, since it kept looping around. Kind of like holding two mirrors together. I guess it would keep going forever, except the computer would eventually crash. I closed the first vnc windows pretty quickly, and everything was back to normal. I wouldn’t recommend doing this, but I wanted to see what would happen.

you come there with 127.0.0.1 as ip, right?
It wasn’t actually ‘opening’ new sessions, only redrawing the same session continuously. You’re machine won’t crash from just that.
@Vms100 -
anything in the 127.*.*.* range is for loopback purposes for most network devices. so yes, 127.0.0.1 will work for this.