Learning Linked Servers - Why would a database be linked to itself

Refer to this discussion in the docs about why a loopback linked server could be useful.

In general, no, you shouldn't be using loopback linked servers (or ideally linked servers at all). There is a performance hit, not gain by using linked servers. However linked servers can provide a level of indirection in the database in the rare case you need it. For example suppose that you needed data from another database. If the databases are on the same server you could just reference the other DB. But that might be the case across your environments. For example maybe your development environment has multiple databases on the same server so direct references would be fine. But in production your databases reside on different servers. In that case a linked server might be a way to indirectly reference the other DB. In dev it points to itself but in prod it points to the other server. Because it is hidden behind a synonym the actual DB code doesn't have to change, just the linked server reference.

Linked servers may also be useful during migrations when you're splitting a larger database into smaller one's, or perhaps moving from one server to another piecemeal. In all cases you should avoid using linked servers if possible but if you really need the indirection then that is what they are there for.

I cannot answer to why an older version of BizTalk would be using it. Perhaps they needed it for indirection.

Adding to Michaels post, another reason for loopback servers is that you want autonomous transactions. Say that you you want to log a progress message to a table. And you are working inside a transaction. Furthermore, you want those log messages to remain in the table, even if the transaction fails and is rolled back. One way to achieve this is to set up a loopback server, and configure not to promote the local transaction to be distributed.

Thank you very much for the answers. I found all three extremely helpful and clear. I Selected the Link to Stack exchange as it provided a very detailed response and links to additional discussions on this topic.