I don't think that creating loopback files automatically is a good idea. In the normal use case (instead if during testing) any typo or error in the device name will result in a loopback file being created instead if returning a useful error to the user. For example, if someone accidentally runs "mkfs.lustre /dev/sfa" instead of "sda" this will result in a loopback file being created in /dev that will initially work, but will be very slow and will later fail when the root Filesystem runs pit of space.
I would rather that testers/scripts make sure that the loopback file it created first, and allow mkfs.lustre to return an error if this us not done correctly.
Please resubmit the patch with just the other bug fixes.
Should no longer exist now LU-3682 has been reverted