One of two things can happen once the host/domain specification is rewritten.
If the channel tag is associated neither with the local channel nor a channel marked with the routelocal channel keyword, or there are no additional host/domain specifications in the address, the rewritten specification is substituted into the address replacing the original specification that was extracted for rewriting, and the rewriting process terminates.
If the channel tag matches the local channel or a channel marked routelocal and there are additional host/domain specifications that appear in the address, the rewritten address is discarded, the original (initial) host/domain specification is removed from the address, a new host/domain specification is extracted from the address, and the entire process is repeated. Rewriting will continue until either all the host/domain specifications are gone or a route through a non-local, non-routelocal channel is found. This iterative mechanism is how the MTA provides support for source routing. In effect, superfluous routes through the local system and routelocal systems are removed from addresses by this process.