Understanding cloudflare for SaaS configuration

I’m trying to configure “Cloudflare for SaaS”. According to this (https://developers.cloudflare.com/cloudflare-for-platforms/cloudflare-for-saas/start/getting-started/) I need to add 2 DNS records:

Record Type Name Content
Fallback origin A proxy-fallback.saasprovider.com AWS Loadbalancer target*
CNAME target CNAME * proxy-fallback.saasprovider.com

Please note that, I want my 2nd record as wildcard to have sites like <anything>.saasprovider.com.

Now, subdomains of my customers, like shop.customersite.com works when they point to proxy-fallback.saasprovider.com

If customers don’t have domain so I give them a subdomain like shop1.saasprovider.com it works too. In the first case I get the actual host name e.g. shop.customersite.com properly in the host header in my application behind AWS load balancer. But in the 2nd case I get a private IP (e.g. 172.x.x.x) as the host header in my application.

I understand that If I point the 2nd record directly to AWS Loadbalancer target instead of the proxy-fallback, it’ll work. But would that be a wrong approach?

Thank you.

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