Does group policy loopback processing apply to that policy that it is defined in, or all policies applied to that container?
For example, assume there are 2 group policy objects: one has loopback processing enabled and the other does not. Both policies contain user settings, and are applied to a computer container.
Which policies will be applied? Both? Or just the policy that has loopback processing enabled?
The loopback processing mode is a computer configuration and has effect on the target computer (don't forget that this setting ends up in the computer's registry)
It's not a per-GPO setting, the usual priority/precedence of GPOs are still valid here. If GPO n°1 has loopback processing enabled, you don't need to enable it on other GPO for computers that are in the scope of GPO n°1.
You can learn more about loopback processing by reading this blog post: https://blogs.technet.microsoft.com/askds/2013/02/08/circle-back-to-loopback/