MS NLB: why are multicast packets received by all servers on the LAN, not just members of the cluster

Your rule's IP address seems to be incorrect : 192.132.1.0/30 in your firewall rules picture and 192.168.132.2 in your logs

The firewall rule IP should probably be allowing multicast traffic from 192.168.132.0/30 (or the appropriate subnet)

The problem is described in the meeting report which is referenced as [IETF56] in RFC4541:

Problem - Router <-> IGMPv2 snooping switch <-> IGMPv3 capable host

Router sends IGMPv3 query, which tells the host to use IGMPv3 Hosts send IGMPv3 reports

What then happens ?

Switch does one of these 3 :

1. Doesn’t forward reports
2. Forwards reports but does not forward data
3. Forwards reports and data but no queries, data then times out

Result - Multicast breaks when you upgrade a router or host (whichever is last) to IGMPv3.

Flooding unregistered streams works around the problem in the case 1 (when the old switch does not forward IGMPv3 reports), and should not make a difference in cases 2 and 3 (when IGMPv3 reports will be passed through the old switch).

As for which problem (dropped traffic or excessive flood) is worse, this highly depends on a particular situation. In some cases flooding may be worse because, unlike dropped traffic, it might not be noticed immediately during testing, and when at some later time the traffic volume increases enough to make flooding a problem, the broken configuration may be widely deployed, needing a lot of work to fix it.