loopback interface behaviour

Suppose the following scenario:

[root@Test ~]# ip a
1: lo: mtu 16436 qdisc noqueue state UNKNOWN
link/loopback 00:00:00:00:00:00 brd 00:00:00:00:00:00
inet 127.0.0.1/8 scope host lo
inet 10.0.10.10/16 brd 10.0.0.1 scope host lo
2: eth0: mtu 1500 qdisc mq state UNKNOWN qlen 1000
link/ether 00:0c:29:fa:2c:7b brd ff:ff:ff:ff:ff:ff
inet 10.0.10.20/16 brd 10.0.0.1 scope global eth0

We discovered that if any ip address is set with a specified class for the loopback interface, the whole class of IPs (existing in the network or not) will be picked up by this host. More than that, this behaviour will propagate throughout the whole network, meaning that this machine will respond to any arp request for any IP in this class, leading to a network failure.

We could not find any clear information on why is this happening (a bug?) so please bring some light on this subject.
Thank you!