I suspect that removing the "localhost." record was nothing to do with IPv6 and everything to do with a corporate policy to not have anything other than the Microsoft default contents in hosts files, possibly because of concerns relating to malware prevention. The problem is possibly the result of the default hosts content changing in Windows NT 6.1.
* https://support.microsoft.com/en-gb/help/972034/
As of Windows NT 6.1, lookups of "localhost." are handled internally within (as I understand) the DNS Client, and never require inspecting a hosts file or sending a query to a DNS server. So the new default hosts file content no longer contains a "localhost." record. But use the Windows NT 6.1 or later default hosts file content on earlier versions of Windows NT, and one will see "localhost." queries being sent by the DNS Client to a server.
Handling "localhost." within the DNS Client is -- reportedly -- so that the DNS Client can inspect the local machine's protocol support and only return non-empty AAAA and A resource record sets if IPv6 or IPv4 is actually enabled on the machine.
My guess is that it was some hack they tried to disable IPv6, but aside from the insane load it added to the DNS infrastructure, the other result is that if these machines talk to a malicious resolver, their traffic destined for the loopback interface could end up going anywhere and being captured by anyone.
Great job!