"In the loop" is a reference to the OODA loop, which is the decision cycle of observe, orient, decide, and act, developed by military strategist and United States Air Force Colonel John Boyd. "In the loop" has a specific tactical meaning, which is that you're able to do a full OODA loop cycle faster than a comparable AI/man system which gives a strategic advantage and maybe used against oppositional forces in a variety of ways; most interesting is applying it to PsychOps.

"Man in the loop" reference can be found in use by the US AirForce going back to the 80s for weapon systems design; specifically between fighter jet systems and pilots. I've heard that US AirForce used brain implants as early as the 90s in fighter pilots.

Here's an example of the US Army reads soldier's brain waves to speed up image analysis:

http://newatlas.com/us-army-eeg-brainwave-image-analysis/403...