fix(client): treat *.localhost as loopback for OAuth token endpoints

RFC 6761 §6.3 reserves names ending in .localhost as loopback. Exempt
them from the SEP-2207 https token-endpoint guard (same as localhost /
127.0.0.1 / ::1) so host-based multi-tenant local dev works.

Fixes #2591

Author: arimu1

packages/client/src/client/auth.ts

@@ -829,9 +829,18 @@ export function applyPublicAuth(clientId: string, params: URLSearchParams): void
     params.set('client_id', clientId);
 }
 
-/** Loopback hosts exempt from the in-transit `https:` requirement (RFC 8252 §7.3). */
+/**
+ * Loopback hosts exempt from the in-transit `https:` requirement (RFC 8252 §7.3).
+ * Includes bare `localhost` and any name ending in `.localhost` (RFC 6761 §6.3).
+ */
 function isLoopbackHost(hostname: string): boolean {
-    return hostname === 'localhost' || hostname === '127.0.0.1' || hostname === '[::1]' || hostname === '::1';
+    return (
+        hostname === 'localhost' ||
+        hostname.endsWith('.localhost') ||
+        hostname === '127.0.0.1' ||
+        hostname === '[::1]' ||
+        hostname === '::1'
+    );
 }
 
 /**

packages/client/src/client/authErrors.ts

@@ -148,7 +148,7 @@ export class InsecureTokenEndpointError extends OAuthClientFlowError {
     constructor(tokenEndpoint: string) {
         super(
             `Refusing to send credentials to non-https token endpoint '${tokenEndpoint}'. ` +
-                `OAuth token requests MUST use TLS (localhost / 127.0.0.1 / ::1 are exempt).`
+                `OAuth token requests MUST use TLS (localhost / *.localhost / 127.0.0.1 / ::1 are exempt).`
         );
         this.tokenEndpoint = tokenEndpoint;
     }

packages/client/test/client/auth.test.ts

@@ -2462,6 +2462,8 @@ describe('OAuth Authorization', () => {
         it('assertSecureTokenEndpoint: throws on non-loopback http, returns URL for loopback', () => {
             expect(() => assertSecureTokenEndpoint('http://10.0.0.5/token')).toThrow(InsecureTokenEndpointError);
             expect(assertSecureTokenEndpoint('http://127.0.0.1:3000/token')).toBeInstanceOf(URL);
+            expect(assertSecureTokenEndpoint('http://tenant.example.localhost:3300/token')).toBeInstanceOf(URL);
+            expect(assertSecureTokenEndpoint('http://localhost/token')).toBeInstanceOf(URL);
         });
 
         it('rejects a non-https token_endpoint before sending credentials', async () => {
@@ -2530,24 +2532,27 @@ describe('OAuth Authorization', () => {
             expect(mockFetch.mock.calls.some(c => c[0].toString().includes('/token'))).toBe(false);
         });
 
-        it.each(['http://localhost:9001/token', 'http://127.0.0.1:9001/token', 'http://[::1]:9001/token'])(
-            'permits loopback host %s',
-            async tokenEndpoint => {
-                mockFetch.mockResolvedValueOnce(Response.json({ access_token: 't', token_type: 'Bearer' }));
-                await expect(
-                    refreshAuthorization('http://localhost:9001', {
-                        metadata: {
-                            issuer: 'http://localhost:9001',
-                            authorization_endpoint: 'http://localhost:9001/authorize',
-                            token_endpoint: tokenEndpoint,
-                            response_types_supported: ['code']
-                        },
-                        clientInformation,
-                        refreshToken: 'rt'
-                    })
-                ).resolves.toBeDefined();
-            }
-        );
+        it.each([
+            'http://localhost:9001/token',
+            'http://127.0.0.1:9001/token',
+            'http://[::1]:9001/token',
+            'http://tenant.example.localhost:3300/token',
+            'http://app.localhost:9001/token'
+        ])('permits loopback host %s', async tokenEndpoint => {
+            mockFetch.mockResolvedValueOnce(Response.json({ access_token: 't', token_type: 'Bearer' }));
+            await expect(
+                refreshAuthorization('http://localhost:9001', {
+                    metadata: {
+                        issuer: 'http://localhost:9001',
+                        authorization_endpoint: 'http://localhost:9001/authorize',
+                        token_endpoint: tokenEndpoint,
+                        response_types_supported: ['code']
+                    },
+                    clientInformation,
+                    refreshToken: 'rt'
+                })
+            ).resolves.toBeDefined();
+        });
     });
 
     // SEP-2207 verify-only: behaviors already correct at the v2 baseline,
@@ -4368,6 +4373,7 @@ describe('OAuth Authorization', () => {
         describe('SEP-837: application_type heuristic default', () => {
             it.each([
                 ['http://localhost:3000/callback', 'native'],
+                ['http://tenant.example.localhost:3300/callback', 'native'],
                 ['http://127.0.0.1:8080/cb', 'native'],
                 ['http://[::1]:8080/cb', 'native'],
                 ['myapp://oauth/callback', 'native'],

test/e2e/requirements.ts

@@ -2345,7 +2345,7 @@ export const REQUIREMENTS: Record<string, Requirement> = {
     'client-auth:token-endpoint:https-guard': {
         source: 'https://modelcontextprotocol.io/specification/draft/basic/authorization#refresh-token-grant',
         behavior:
-            "The token-exchange and refresh paths refuse to send credentials to a non-https token endpoint (localhost / 127.0.0.1 / ::1 exempt) by throwing InsecureTokenEndpointError, and auth()'s refresh branch surfaces it instead of falling through to a fresh /authorize redirect.",
+            "The token-exchange and refresh paths refuse to send credentials to a non-https token endpoint (localhost / *.localhost / 127.0.0.1 / ::1 exempt) by throwing InsecureTokenEndpointError, and auth()'s refresh branch surfaces it instead of falling through to a fresh /authorize redirect.",
         transports: ['streamableHttp'],
         addedInSpecVersion: '2026-07-28',
         note: 'This exercises the HTTP hosting/auth layer and OAuth client; the matrix transport arg is ignored, so it runs as a single streamableHttp-labelled cell to avoid duplicate runs.'