The purpose of the 127.0.0.1 line added to /etc/hosts?

[sootsnoot]

I am not experiencing any problem with XAMPP 1.8.2-6 on Amazon Linux. But I am making some changes to my /etc/hosts file and found this line:

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127.0.0.1 ip-10-0-0-12 # added by Apache Friends XAMPP

Does anyone know the reason that the installer adds this line? What is its purpose, and does anything in XAMPP rely on its presence? The name ip-10-0-0-12 does match the private IP address (10.0.0.12) of the instance where I installed it, but that address would obviously change if I launched a new instance with XAMP installed on it. I'd like to delete the line, since it has no value to software that I'm aware of. Could that cause any problem? I haven't found any so far, but I'd like to avoid any future surprise.