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You can't have overlapping AllowedIPs for peers on the same interface. Wireguard has to decide which encryption/decryption keys to use based on the AllowedIPs.

For your use case you need two wg Interfaces on each host (w/ different ListenPort and AllowedIPs=0.0.0.0/0) and a routing daemon (like bird).

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So wireguard is focused on the use case of having a single central point where all the traffic has to go through? Reading throught the page it seemed it was more the tinc model of distributed P2P VPN overlay which to me seems much more powerful. Redundancy comes for free and performance is improved because you get direct links between nodes instead of having to proxy all the traffic.

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