Local hostnames have never been supported by the IANA or anyone else as far as I know. Using them is risky because they usually work, but the specs say they shouldn't.
Local domains are easy to implement right by registering any domain name (even a free one) and setting that as your local DNS domain. If you register pantalaimon.gq and set that as your local DNS suffix, any non-FQDN hostname should be resolved to host.pantalaimon.gq. Entering http://netflix/ will resolve to http://netflix.pantalaimon.gq/. Such a system also gives you more control over your local DNS, as you can do more than A and AAAA records now. Only http://netflix./ would that actually constitute as a FQDN and bypass the local domain.
I used to use internal DNS infrastructure without a domain until I realised all DNS queries were being sent to DNS because the DNS suffix my ISP appended (something like example.com), resulting in occasional queries to servername.example.com that failed.
If you use domains to refer to localhost, just use .localhost as the TLD: it's been reserved for that exact use.
A/AAAA records on gTLD level are not allowed by ICANN. ccTLDs may have these records (probably just an oversight from the past) and some do (http://ai. for example)
Maybe not as much as an oversight but (as I understood) mostly due the fact that most ccTLD registries predate the existence of ICANN. As the ccTLDs as such weren't issued by ICANN, there's no ICANN policy that would apply to them for stuff like this.
Countries view ccTLDs as their sovereign property and territory on the Internet, and refuse to be (involuntarily) bound to any rules or requirements as a matter of sovereignty. It’s a huge source of geopolitical conflict within the IANA/ICANN split (and with DNS in general).
A number of countries have _voluntarily_ agreed to follow ICANN’s principles for good management and interoperability [1], but jurisdictions gonna jurisdict I guess.