This issue is similar to MCPE-6861 ( https://bugs.mojang.com/browse/MCPE-6861 ), but this was considered at the time as "fixed", but it is still an issue on the current version (v1.17.41 hotfix). The devices connected to the hotspot can connect to the server hosted on the same computer that provides the hotspot, but the client running on the host itself (server+hotspot) cannot connect to it via localhost, as the client refuses to connect without wi-fi (it is an offline hotspot).

How to reproduce this issue (Issue 1):

1)Server- I am using BDS (Bedrock Dedicated Server) with online-mode=false on the configuration files.

2)Hotspot- The default hotspot from windows 10 won't work on my situation, so I use Hotspot Lite instead (can be downloaded from Microsoft Store for free) and I make it run an offline hotspot on my laptop. For this situation, I am not connected to any sort of Internet provider or network (wi-fi, ethernet, etc.), so I turned off the wi-fi for the tests.

3)Testing the clients on other devices (optional)- Connect to the hotspot on another device, open the server on the host computer (the same that is running the hotspot) and try to connect to it. According to my tests, it will find the server on the "friends" tab and connect successfully.

4)Testing the client on the host of the server+hotspot (the issue)-On the "servers" tab, add a server with the localhost address (localhost or 127.0.0.1) for the first time you open the game. After adding it, remove it from the server list, making it appear on the "friends" tab as a LAN game. These steps should be executed quickly, as the server tab tends to refuse adding servers while offline (if it refuses, close and open the game again to make the button "add server" appear again) and the LAN game disappears after a few seconds (if you are a developer and you are reading this, could you please make it easier to join a localhost server without a xbox account nor Internet connection, please?). Then, try to connect to the LAN game (pointed to localhost) and you might notice that it refuses to connect to the server, hosted on the same computer as the client, because it has no access to an external network (wi-fi, ethernet, mobile data, etc.).

I will try to provide screenshots of my trials to connect to the server on the computer that hosts it while being offline.

Also another issue related to this(Issue 2):

This issue also applies to worlds opened (via Minecraft Bedrock Client) without connection to an external network on all devices, but on a different way. Instead of refusing to connect to the world, it simply won't broadcast the game session to the LAN nor accept connections from the LAN, as the game automatically sets the world to "private" (sets the "visible to LAN players" setting from multiplayer to off) for not being connected to an external network.

I added more information on the name of the screenshot files.

Thank you! Hope the dev team can make it easier to play with friends while travelling or while on a trip with the least amount of devices and without Internet access/ external network.

I've tried to host a LAN party without internet on a windows 10 laptop, but issue 2 also applies for the other platforms (mainly mobile devices). I'm trying to provide as much information as possible about this issue.