APIPA (Automatic Private IP Addressing) assigns an IP address in the range 169.254.x.x when a DHCP server cannot be contacted, and it sets the default gateway to 0.0.0.0 because APIPA is designed only for local communication within the same subnet. The document states:
"APIPA allows for automatic, ad hoc network communication within a single subnet when a DHCP server is not available. In this state, the default gateway is typically set to 0.0.0.0 because APIPA does not provide routing to other networks."