When two hosts in upgraded edge networks communicate, addresses are rewritten bilaterally such that the second rewrite is the inverse of the first. The result is the same as with tunneling. The difference is that it works without an additional IP header.
Not true. The packet, when traveling in the core, doesn't contain the original addresses. With tunneling, it does.
And if you have ACLs anywhere in boxes after the translator, they need to change when the translate addresses change. With tunneling, when the inner header addresses are EIDs that are portable, you can change the outer header addresses and the ACLs in the core never have to change.
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