CE1,CE2 are same customer edge routers. PE1,PE2 are provider Edge routers of same ISP. and they connected as show in image.
we are running OSPF between PE,CE for BGP/MPLS IP VPNs. PE1-CE1 (Network N1) & PE2-CE2 (Network N2) links are in area0.
OSPF on PE1,PE2 have same domain ID configured to make OSPF routes from one CE to other treated as IA routes.
Now the N1 is connected network to PE1 and Administrative distance for connected is higher than OSPF. so,PE1 will have N1 as connected route.
Then we have only choice to redistribute the N1 to CE2 is by enabling 'redistribute connected' in BGP of PE1. As the domain ID will not be inserted when redistributing connected routes, CE2 will treat it as External Type 2 Network.
Doesn't it wrong to treat a network of same area/domain as external..?