How does lvh.me (localtest.me, vcap.me) works?

Question

There are several hosts such as lvh.me, localtest.me, vcap.me those always resolves to 127.0.0.1.

BUT, I used lvh.me to test OAuth2 workflow - I set the callback url on remote server to https://lvh.me/callback and configured local webserver to listen 127.0.0.1:433 (with self-signed certificate) on host lvh.me and proxy the request to my local backend. It worked.

Could someone, please, explai me how does it work and why request from remote server with host name lvh.me resolves to my local machine?