XDCR throws errors during replication to another bucket within the same node within source cluster

This is a negative test, I'm not sure if XDCR was designed to support this type of replication and I don't find it documented either, but by definition I would expect XDCR to work only between data centers/clusters. However it appears XDCR allows replication between buckets within the same node.

Steps to reproduce
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• Create a single/multi node cluster. Create 2 buckets and pump data into one.
• In 'Create remote cluster reference' dialog, add one of the IPs belonging to the source cluster itself or the node you are logged on to. The cluster reference can be successfully created. Screenshot attached.
• Set up replication to the empty bucket within the same cluster using 'Create replication' dialog, no error is thrown.

Once replication is set up, data transfer is seen between buckets(aruna_bkt186 and new), item count increases on empty bucket(new), stops after a while and under replication "last 10 errors" the following errors are seen:

2013-11-08 19:13:32 [XMem Srv] Error replicating vbucket 990: "parent vb replicator: <0.6753.162>, xmem stats: in batch of 15 docs: flushed: 0, rejected (eexists): 0; remote memcached errors: enoent: 0, not-my-vb: 0, invalid: 0, timeout: 0, others: 15. Please see logs for state dump and complete list of error keys."
2013-11-08 19:13:32 [XMem Srv] Error replicating vbucket 962: "parent vb replicator: <0.6370.162>, xmem stats: in batch of 12 docs: flushed: 0, rejected (eexists): 0; remote memcached errors: enoent: 0, not-my-vb: 0, invalid: 0, timeout: 0, others: 12. Please see logs for state dump and complete list of error keys."
2013-11-08 19:13:32 [XMem Srv] Error replicating vbucket 848: "parent vb replicator: <0.6704.162>, xmem stats: in batch of 22 docs: flushed: 0, rejected (eexists): 0; remote memcached errors: enoent: 0, not-my-vb: 0, invalid: 0, timeout: 0, others: 22. Please see logs for state dump and complete list of error keys."
2013-11-08 19:13:32 [XMem Srv] Error replicating vbucket 649: "parent vb replicator: <0.6409.162>, xmem stats: in batch of 13 docs: flushed: 0, rejected (eexists): 0; remote memcached errors: enoent: 0, not-my-vb: 0, invalid: 0, timeout: 0, others: 13. Please see logs for state dump and complete list of error keys."
2013-11-08 19:13:32 [XMem Srv] Error replicating vbucket 540: "parent vb replicator: <0.6242.162>, xmem stats: in batch of 16 docs: flushed: 0, rejected (eexists): 0; remote memcached errors: enoent: 0, not-my-vb: 0, invalid: 0, timeout: 0, others: 16. Please see logs for state dump and complete list of error keys."
2013-11-08 19:13:32 [XMem Srv] Error replicating vbucket 318: "parent vb replicator: <0.29208.166>, xmem stats: in batch of 22 docs: flushed: 0, rejected (eexists): 0; remote memcached errors: enoent: 0, not-my-vb: 0, invalid: 0, timeout: 0, others: 22. Please see logs for state dump and complete list of error keys."

Expected behaviour
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If this replication is not allowed, the 'Create remote replication reference' dialog should validate if the IP added does not belong to the same source cluster.

The diag.zip is huge so pls let me know if you need cbcollect info.