Abstract: The available literature reveals that it is incomplete for the impedance-based method to analyze the stability of multiterminal systems through partial AC/DC loops. Such a phenomenon is explained theoretically in this paper based on a two-level voltage source back-to-back converter. Firstly, the general derivation of the terminal/loop analytical impedance model in common coordinates is perfected using the state-space.Secondly, by comparing the frequency domain determinations of stability in different loops with the time-domain zeros/poles of overall system, it is proved that the zero-pole cancellation leads to the incomplete observability of the subsystem to the overall system, which is the root cause of failure of partial criteria. Thirdly, the generality of conclusion among various control strategies for the same converter and various types of converters is clarified. Finally, the impedance interaction-based multiterminal system stabilizing design is deduced with the related concepts.