It is possible to configure the address of a loopback interface, other than the router-id, as the destination of an RSVP LSP, or a P2MP S2L sub-LSP. In the case of a CSPF LSP, CSPF searches for the best path that matches the constraints across all areas and levels of the IGP where this address is reachable. If the address is the router-id of the destination node, then CSPF selects the best path across all areas and levels of the IGP for that router-id; regardless of which area and level the router-id is reachable as an interface.
In addition, the user can now configure the address of a loopback interface, other than the router-id, as a hop in the LSP path hop definition. If the hop is strict and corresponds to the router-id of the node, the CSPF path can use any TE enabled link to the downstream node, based on best cost. If the hop is strict and does not correspond to the router-id of the node, then CSPF fails.