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As discussed with Jason, users can no longer accept 127.0.0.1 as DNS for Undercloud. The Undercloud installation will succeed but an OSP deployment will fail. The Undercloud DNS must resolve to the Satellite's DNS to allow SSL connections between the Undercloud and Overcloud nodes. Also need to add a note on SSH keys used for authentication between Undercloud and the hypervisor hosting Overcloud nodes.
Verified in latest doc spin. Note: PXE + SSH option is documented in Section 4.2 step 4b iii
Since the problem described in this bug report should be resolved in a recent advisory, it has been closed with a resolution of ERRATA. For information on the advisory, and where to find the updated files, follow the link below. If the solution does not work for you, open a new bug report. https://access.redhat.com/errata/RHEA-2017:0335