However, there is another section in OpenSSO which we need to configure the same way - Policy Configuration. We have since upgraded to OpenSSO 8.0 U2 Patch 1. However, the same bug exist.
As long as the format is "local server name|host name:port", the OpenSSO server will get confused and will not parse the string properly.
What's the workaround?
The best we can do is to configure OpenSSO in a load-balanced manner (point to localhost). Failover is not possible in this configuration.