Typically, an Ethernet port loopback only echoes back received frames. That is, the received source and destination MAC addresses are not swapped. However, not all Ethernet equipment supports echo mode, where the original sender of the frame must support receiving its own port MAC address as the destination MAC address.
The MAC swapping feature on the 7705 SAR is an optional feature that will swap the received destination MAC address with the source MAC address when an Ethernet port is in loopback mode. After the swap, the FCS is recalculated to ensure the validity of the Ethernet frame and to ensure that the frame is not dropped by the original sender due to a CRC error.