To be clear, the bypass list doesn't work quite like that; the strings you can use in the bypass list are the same strings as you can use in IE's
Proxy Bypass List, so you can use e.g.
*.example.com; <local>; *.someotherthing.com. The string
<loopback>doesn't have any meaning.
The proxy bypass list used when Fiddler registers as the system proxy is found at CONFIG.sHostsThatBypassFiddler; be sure to set this string before you call the FiddlerApplication.Startup() method.