localhost and streaming video

I’m using Comodo Firewall “Filter loopback traffic” is ON.

When I set an media player (e.g. Windows Media Player) to “Blocked Application” (block all incoming and outgoing requests), it can’t play streaming video from internet, but can play streaming video from localhost (despite “Filter loopback traffic” setting).

Is this intended behavior? And why?

Localhost refers to loopback zone or, as network development interface, not Local network. If your playing media from a HDD or from the local network it will not use the loopback zone.

What I did is creating video stream with Windows Media Encoder and playing it with Windows Media Player (connecting to “http://localhost:8080”) on the same PC. WMP must not connect to “http://localhost:8080” if the filtering works… I guess?

Whats the level of the firewall, i.e. safe mode, custom policy, etc?

Safe mode. But I set WMP to “Blocked Application” by adding the application rule manually.