You seem to be implying that masquerading is ``detectable'' in some way by external machines, that is, that somehow it's going to screw up (or make angry) other routers on the Internet. This completely escapes me.

In other words, if you're saying it violates some protocol, then that violation should be visible on the wire between the masquerading host and the rest of the Internet. Can you describe what that violation is?

Remember, we're talking about a situation where the hosts behind the masquerading host are on a ``leaf'' network, without any other route to the Internet. Obviously, it would be totally screwey otherwise.

So as far as the Internet, the IETF, the protocol police, and everybody else is concerned, there's only a single host at this site and it's obeying all the rules! If you disagree, then the burden of proof is on you to quote the relevant RFC's.