There is a pretty nice explanation here 
https://forums.juniper.net/t5/Routing/what-does-quot-icmp-tunneling-quot-mean-in-mpls-vpn/td-p/164284

Nick
 

On 01/09/2016, 15:21, "juniper-nsp on behalf of [email protected]" 
<[email protected] on behalf of [email protected]> wrote:

    James, thanks for the suggestion.  Enabling icmp-tunneling on the PEs fixed 
it!
    
    Kevin
    > On Aug 31, 2016, at 4:13 PM, James Jun <[email protected]> wrote:
    > 
    > On Wed, Aug 31, 2016 at 03:50:26PM -0500, [email protected] wrote:
    >> I have a simple lab setup using logical systems on an MX80 and I???m 
trying to get trace route to work from CE1 <-> PE1 <-> P1 <-> PE2 <-> CE2 using 
ipv6 and I always get loss on the 2nd hop although it completes after the 
timeouts.  Any clues would be appreciated.
    > 
    > Have you tried enabling icmp-tunneling under [protocols mpls] on hop 2?  
It seems like your P router is popping label and trying to return using inet.0
    > 
    > James
    > 
    
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