Upstream ticket:
https://fedorahosted.org/freeipa/ticket/2692

Fixed upstream:
master: https://fedorahosted.org/freeipa/changeset/c481e40d78023731ec9def5fd367bed8c75cd416
ipa-3-1: https://fedorahosted.org/freeipa/changeset/39ec75bef9077c0e520708ae22b9a9196b68105e

Verified using ipa-server-3.3.3-5.el7.x86_64

Automated test result:
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::
:: [   LOG    ] :: BZ817071 -  ipa-server-install ignores --hostname
::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::


MARK-LWD-LOOP -- 2013-12-03 16:09:45 --
:: [   PASS   ] :: Running '/usr/bin/expect /tmp/remote_exec.exp >> /tmp/remote_exec.out 2>&1' (Expected 0, got 0)
set timeout 360 
set send_slow {1 .1}
spawn ipa-server-install --setup-dns --forwarder=10.10.160.1 --hostname=qeblade6.testrelm.com -r TESTRELM.COM -n testrelm.com -p Secret123 -P Secret123 -a Secret123
match_max 100000
sleep 2
expect "Existing BIND configuration detected*"
send "yes"
send "\r"
expect "Do you want to configure the reverse zone*"
send "no"
send "\r"
expect "Continue to configure the system with these values*"
send "yes"
send "\r"
expect eof 
:: [   PASS   ] :: Running 'cat /tmp/remote_exec.exp' (Expected 0, got 0)
spawn ipa-server-install --setup-dns --forwarder=10.10.160.1 --hostname=qeblade6.testrelm.com -r TESTRELM.COM -n testrelm.com -p Secret123 -P Secret123 -a Secret123

The log file for this installation can be found in /var/log/ipaserver-install.log
==============================================================================
This program will set up the IPA Server.

This includes:
  * Configure a stand-alone CA (dogtag) for certificate management
  * Configure the Network Time Daemon (ntpd)
  * Create and configure an instance of Directory Server
  * Create and configure a Kerberos Key Distribution Center (KDC)
  * Configure Apache (httpd)
  * Configure DNS (bind)

To accept the default shown in brackets, press the Enter key.

WARNING: conflicting time&date synchronization service 'chronyd' will be disabled
in favor of ntpd

Existing BIND configuration detected, overwrite? [no]: yes
Warning: skipping DNS resolution of host qeblade6.testrelm.com
Do you want to configure the reverse zone? [yes]: no

The IPA Master Server will be configured with:
Hostname:      qeblade6.testrelm.com
IP address:    10.16.4.29
Domain name:   testrelm.com
Realm name:    TESTRELM.COM

BIND DNS server will be configured to serve IPA domain with:
Forwarders:    10.10.160.1
Reverse zone:  No reverse zone

Continue to configure the system with these values? [no]: yes

The following operations may take some minutes to complete.
Please wait until the prompt is returned.

Configuring NTP daemon (ntpd)
<..snip..>
:: [   PASS   ] :: Running 'cat /tmp/remote_exec.out' (Expected 0, got 0)
:: [ 16:12:43 ] ::  Verify kinit
:: [ 16:12:43 ] ::  execute expect file: /tmp/kinit.6698.exp

set timeout 30
set force_conservative 0
set send_slow {1 .001}
spawn /usr/bin/kinit -V admin
expect Password for *
send -s -- Secret123\r
expect eof 
spawn /usr/bin/kinit -V admin
SecrUsing existing cache: persistent:0:krb_ccache_N2bBK6M
Using principal: admin
et123
Password for admin: 
Authenticated to Kerberos v5
Default principal: admin
:: [ 16:12:44 ] ::  Success: kinit as [admin] with password [Secret123] was successful.
:: [   PASS   ] :: Get administrator credentials after installing (Expected 0, got 0)
:: [ 16:12:44 ] ::  Verify ipactl status
<..snip..>
BZ817071-ipa-server-install-ignores-hostname result: PASS

This request was resolved in Red Hat Enterprise Linux 7.0.

Contact your manager or support representative in case you have further questions about the request.