Use the latest 12.4T software (at least 12.4(15)T5) if you want reliable CPPr operation.
- control-plane aggregate service-policy disables any control-plane subinterface service policies.
- If you want to use the per-subinterface (host, transit and cef-exception) policies, you have to remove the inbound service policy from the control-plane aggregate path.
- Routed packets that cannot be CEF-switched (have to be punted to another switching mechanism) are classified as transit packets.
- Local multicast packets with destination IP addresses within IP prefix 126.96.36.199/24 and packets with TTL <= 1 are classified as transit packets in 12.4(15)T5. These packets will be classified as cef-exception packets in the future (see the Understanding CPPr document).
- Unicast packets without IP options addressed to the router and having TTL > 1 are classified as host packets.
- Non-IP traffic (ARP, Frame Relay keepalives, CDP ...) is classified as cef-exception.
The TTL-related rules explain why the router classifies IBGP packets as host packets and EBGP packets as transit packets. As soon as you configure neighbor ebgp-multihop on the router router, inbound EBGP packets become host packets.