The only task of a DNS server is (or should be) to tell you how to get to a resource you’re looking for by name. So, the only thing that is going to be reallistically affected is your (initial) connection times. And – since this is c/selfhosted – if you are setting a decent DNS cache in your local network, that should be even less of an issue.

The only borderline scenario that I could see feasible, since this is c/selfhosted , is that some software you are setting up that requires nanosecond DNS resolution or somesuch sillyness is going to fail or report false errors. But why would you even do that?

Is this kind of thing why uBO added the localhost / localnet filter? Or does this go beyond that?