User blog comment:Samken600/What is a cable loop?/@comment-5395879-20120811060250

A cable loop is any setup where the ouput of an energy storage device is connected to its input. For example connecting the output part of a batbox to one of its input sides.

It's bad because while it doesn't generate extra energy or lose any energy, it transfers the energy infinitely around the loop. This generates an infinite number of energy "packets" which the server has to process. This happens very quickly causing the server to be unable to keep up.