In your case, it won't at any rate do a loop. You have the "L" switch on, fixing that particular rule as the last one.
Further, you have to explicitly force the next iteration by using the "N" or "NS" switches, or it will just move through your rule file and stop with the last rule that matches. From the docs:
N (Next iteration)
Forces rewriting engine to modify
rule's target and restart rules
checking from the beginning (all
modifications are saved). Number of
restarts is limited by the value
specified in the RepeatLimit
directive. If this number is exceeded
N flag will be simply ignored.
NS (Next iteration of the same rule)
Works like the N flag but restarts
rules processing from the same rule
(i.e. forces repeat of the rule
application). Maximum number of a
single rule iterations is given by the
RepeatLimit directive. But a number of
a single rule repeats does not count
for the global number of repeats (i.e.
repeats limit for a number of
iterations caused by N flag is
independent of a number of repeats
caused by NS).