Beware: The use of Fiddler to troubleshoot Internet Explorer issues can complicate the use of the Local intranet zone by effectively disabling the intended behavior of the Include all sites that bypass the proxy server setting. KB174360 describes the Local intranet zone as follows:
By default, the Local Intranet zone contains all network connections that were established by using a Universal Naming Convention (UNC) path, and Web sites that bypass the proxy server or have names that do not include periods (for example, http://local), as long as they are not assigned to either the Restricted Sites or Trusted Sites zone.
When Fiddler is enabled, proxy settings on a client machine are changed to direct all traffic to 127.0.0.1 as seen above. This results in no websites automatically matching the Local intranet zone because none bypass the proxy server.
While troubleshooting a suspected issue with custom user agent entries I had Fiddler running, as is my normal practice. The reported issues was custom user agent strings not being sent, something that won’t happen on IE9 unless Compatibility View is enabled. I’d first thought there was a problem with the Display intranet sites in Compatibility View option not working due to the Local intranet zone assignment not working, but my issue actually turned out to be Fiddler getting in the way by causing no sites to match the Local intranet zone. When Fiddler was disabled and I switched to using an external tap for monitoring, behavior returned to normal.
Fiddler is great for MITMing secure sessions thus making troubleshooting secure websites trivial, so not being able to use it in these circumstances will cause other problems. But there are other ways around that…
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