Having gained further experience with this, I believe this statement is not actually correct:
The ip nat inside destination is actually very similar to ip nat inside source, it doesn’t perform a different action.
ip nat inside
destination will:
- translate the destination IP address of packets that travel from OUTSIDE to INSIDE
- translate the destination IP address of packets that travel from INSIDE to INSIDE
- translate the source IP address of packets that travel from INSIDE to OUTSIDE
It is just used for packets travelling from outside to inside, or even inside to inside. A common use is using a “VIP” for load balancing to several inside IPs.
More explanation here: https://community.cisco.com/t5/switching/quot-ip-nat-inside-destination-quot-use-case/td-p/2800865