My questions are:
A - What do they mean exactly by a "loop failure" ? = Loss of Gas pressure
B - Would such a failure be detected automatically during a flight without any pilot action (without using the TEST switch on the Overheat / Fire protection panel) ? = Yes, detected by the 'Engine and APU Fire Detection Module'
C - If the system is able to 1 - Detect a faulty loop and 2 - Deselect it by itself, why is there an OVHT DET switch to manually select loop A or B instead of the NORMAL position ? = I think its so you can test each individual loop from the flt deck rather than having to go down to the avionics bay prior to Engine start.