Code change:
Also wrap long lines for #processing section.
Comments addressed, PTAL.
Will wait for NAME approval before merging.
LGTM, updated PR for line wrapping.
The changes to ICE candidate gathering are targeted to web browsers; the changes to ICE candidate processing affect all WebRTC endpoints.
If we add this indication, do we also need to clarify the use case for lite ICE agents?
What did you have in mind?
{{#gathering}} starts with "For any host candidate gathered by an ICE agent as part of {{RFC8445}} section 5.1.1," it seems the place we need to revise to resolve this issue. I was thinking of allowing ICE lite implementation to skip the mDNS wrapping, since lite agents only use host candidates (8445, section 2.5). The lite implementation is however not required restricted to ICE agents that always have public IPs from my reading of that section, but rather an alternative to simplify the implementation when possible. So I am still not sure if it makes sense to say lite ICE can be exempted from wrapping; or instead indicating mDNS wrapping can be skipped if host candidates are equivalent to srflx candidates, and automatically the intended use of lite ICE satisfies this condition.
Right, the public IPs exception probably covers this. also indicates that this is really for web browsers, which are not allowed to implement ICE Lite.
Started writing this up today, but realized it's not totally clear how this should work. The idea would be to use STUN to figure out if an IP is public or not, but... Should we wait to hand out the mDNS candidate until we determine if the IP is private (i.e., STUN finishes)? Should we not hand out the mDNS candidate if we get a srflx candidate that shows the IP is not private? If we hand out the mDNS candidate and then get a srflx candidate that matches the local IP, should we make that a host candidate? Once we learn an IP is not public, should we cache that for future ICE gathering sessions (i.e., not give out mDNS candidates?) The easiest thing would probably be to recommend handing out the mDNS and srflx candidates as usual, but allow implementations to skip mDNS for IPs it has learned are public. (Except for RFC1918 addresses, which would always be treated as private.)
Partially addressed in , will probably include some additional clarifying text once it lands
LGTM

Related discussion:
text: not be supported. This document proposes an overall solution to this problem by <del> registering ephemeral mDNS RFC6762 names for each local private IP address, and then providing those names, rather than the IP addresses, to the web application when it gathers ICE candidates. WebRTC implementations resolve these names to IP addresses and perform ICE processing as usual, but the actual IP addresses are not exposed to the web application. </del> <ins> providing a mechanism for WebRTC implementations to register ephemeral mDNS RFC6762 names for local private IP addresses, and then provide those names, rather than the IP addresses, in their ICE candidates.  While this technique is intended to benefit WebRTC implementations in web browsers, by preventing collection of private IP addresses by arbitrary web pages, it can also be used by any endpoint that wants to avoid disclosing information about its local network to remote peers on other networks. WebRTC and WebRTC-compatible endpoints Overview that receive ICE candidates with mDNS names will resolve these names to IP addresses and perform ICE processing as usual.  In the case where the endpoint is a web application, the WebRTC implementation will manage this resolution internally and will not disclose the actual IP addresses to the application. </ins> 2.