This is a clone of issue OCPBUGS-19008. The following is the description of the original issue:
—
Platform:

IPI on Baremetal

What happened?

In cases where no hostname is provided, host are automatically assigned the name "localhost" or "localhost.localdomain".

[kni@provisionhost-0-0 ~]$ oc get nodes
NAME STATUS ROLES AGE VERSION
localhost.localdomain Ready master 31m v1.22.1+6859754
master-0-1 Ready master 39m v1.22.1+6859754
master-0-2 Ready master 39m v1.22.1+6859754
worker-0-0 Ready worker 12m v1.22.1+6859754
worker-0-1 Ready worker 12m v1.22.1+6859754

What did you expect to happen?

Having all hosts come up as localhost is the worst possible user experience, because they'll fail to form a cluster but you won't know why.

However, we know the BMH name in the image-customization-controller, it would be possible to configure the ignition to set a default hostname if we don't have one from DHCP/DNS.

If not, we should at least fail the installation with a specific error message to this situation.

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30/01/22 - adding how to reproduce
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How to Reproduce:

1)prepare and installation with day-1 static ip.

add to install-config uner one of the nodes:
networkConfig:
routes:
config:

• destination: 0.0.0.0/0
  next-hop-address: 192.168.123.1
  next-hop-interface: enp0s4
  dns-resolver:
  config:
  server:
• 192.168.123.1
  interfaces:
• name: enp0s4
  type: ethernet
  state: up
  ipv4:
  address:
• ip: 192.168.123.110
  prefix-length: 24
  enabled: true

2)Ensure a DNS PTR for the address IS NOT configured.

3)create manifests and cluster from install-config.yaml

installation should either:
1)fail as early as possible, and provide some sort of feed back as to the fact that no hostname was provided.
2)derive the Hostname from the bmh or the ignition files