Hello @metalheart , Thank you for reaching out.
As per the documentation here Note that the hostname must be a valid domain name, IPv4 or IPv6.
and this HostName is used for SNI (SSL negotiation) and should match your server side certificate. Even though the AFD is linked via Private Link to the internal Load balancer this backend host name is used to establish TCP connection and then for the TLS Handshake.
Hope this answers your query! Please let me know if you have any additional questions. Thank you!