In the context of IPs, I would assume

Public

means publicly-routable? This seems to be a bug then? v4.27.1

Private addresses may be reported as public in local deployments or when headers aren't set as Fleet is expecting. There's already a fix in place of the next release: https://github.com/fleetdm/fleet/pull/9900

#9900 will fix the Public IP issue in the hosts lists and host details page, but not on the activities. Though maybe this is a-ok for activities as the IP of users logging in will be 127.0.0.1 on dummy/local deployments.