When a traffic is following a local switching on a router where it is moving from VRF-to-VRF, ping to local host from a remote device is dropped.
When traffic lands on router via mpls path, there is no impact.
This issue is triggered only when FPC is enabled with hyper-mode.

DUT> show forwarding-options hyper-mode 

Current mode: hyper mode

Configured mode: hyper mode

DUT> show route 11.11.11.2 

inet.0: 4 destinations, 4 routes (4 active, 0 holddown, 0 hidden)

+ = Active Route, - = Last Active, * = Both

0.0.0.0/0     *[Static/5] 00:29:12

          > to 10.219.34.129 via fxp0.0

TEST.inet.0: 10 destinations, 12 routes (10 active, 0 holddown, 0 hidden)

+ = Active Route, - = Last Active, * = Both

11.11.11.0/30   *[Direct/0] 00:22:05

          > via xe-2/0/0.1

          [BGP/170] 00:22:03, localpref 100

           AS path: 65100 I, validation-state: unverified

          > to 11.11.11.2 via xe-2/0/0.1

Remote> ping 11.11.11.2      

PING 11.11.11.2 (11.11.11.2): 56 data bytes

^C

--- 11.11.11.2 ping statistics ---

3 packets transmitted, 0 packets received, 100% packet loss

When flexible-ethernet-services encapsulation is configured on the egress interface and FPC is enabled with hyper-mode, a traffic blackhole will be observed on the egress interface due to programming issues.

The issue is observed when the policy-map is attached to an ingress port and the traffic is egressing out on a hyper-mode enabled FPC.

Workaround:

Remove knob encapsulation flexible-ethernet-service.

This issue is fixed in PR: 1777932