Hi Sprout,
The DCN function is enabled by default on NE40E. And the loopback interface is automatically created by the DCN. You can neither access nor delete this loopback interface.

To delete this interface, you can only disable the DCN function.
Example
# Disable DCN globally and then enable it globally.
<HUAWEI> system-view
[~HUAWEI] undo dcn
Warning: This operation will disable DCN function.Continue? [Y/N]:y
And the IP address of the loopback interface is actually the NEIP of the device, If you just want to modify the IP, run the ne-ip command.
Example
# Set a NEIP address.
<HUAWEI> system-view
[~HUAWEI] dcn
Warning: This operation will enable DCN function. Continue? [Y/N]:Y
[*HUAWEI-dcn] ne-ip 10.1.1.1 255.255.0.0
For more details, please refer to
https://support.huawei.com/hedex/hdx.do?docid=EDOC1100077986&id=ne-ip&text=null&lang=en