I ran into a situation where one of our sites didn't have an IP assigned, was using "All Unassigned".  When a new site was created under local host and a Host Name assigned -- note a new site not a virtual directory, not just the new site got created.  Instead, the new site shows up under the Sites folder and unbeknownst to me, a Virtual Directory got created under the site originally using "All Unassigned" and having no static IP assigned.

This may be intended functionality but I'd think not.  A rep from our ISP explained this will happen when a script runs to create a site where browsing to it with local host is set up AND another site was already set up under "All Unassigned." 

A similar thing just happened in Visual Studio.  I'm working on troubleshooting a skin issue on a site and need to run up the solution file.  Since the .sln file is in 2008 and I'm running 2013 it wants to upgrade it which will break the site, so I put it in its own folder as shown:

Just by upgrading the solution file in another folder so as not to trash the site, this happened.  The virtual directory created is the same name as in the visual studio upgraded solution file as shown below.

This has the same name as given the site in Visual Studio:

I would think this rather dangerous if it's intended functionality.  I'm no IIS Guru by any stretch of the imagination but I'd think this should not happen.

That's 2 instances of this happening -- one when installing a fresh full-source install (Which is the NewDevDNNVIS site above, it appeared as a VD under sheathrcorp.com) and once when innocently viewing the solution file which, upgraded from 2008 to 2013 in visual studio created, apparently, the virtual dir under Sheathcorp.com.

I've not had this happen, having worked with DNN since summer 2006.