Loopselect is activated either from the select menu or pressing alt-B in edit mode.
The loopselect tool starts from the nearest edge. It performs several tests on the edges that it connectes to.
The selection is confirmed with a left click and an optional modifier. The modifiers are as follows.

Here is an example of a full loop.

Here is a partial loop, ending at 2 edges that only connect to 2 other edges.

The edge of a cube loops like a loop but is not by the definition used.
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