Then upon receiving that packet, HOSTB will send the same packet reversed to HOSTA and we'll start a ping-pong game that will only stop when someone drops the ball (tested on Debian with inetutils-inetd and openbsd-inetd, not xinetd but I assume it's the same).
Which version? The echo protocol is a debugging and measurement tool, it is not supposed to be used for security sensetive tools. It would also be a violation of RFC 862 to change the behaviour in this format, where it is allowed to induce this kinda of a loop.
