Actually it simply expands to .., so rm -rf .* happily deletes ../, therefore ./, etc. If you're in /tmp at the time you're making this mistake, it will clobber /. Current GNU rm may be more careful, though, and warn you of unintended consequences.
After closer inspection, it turns out that this is because I'm a zsh user:
% zsh -c 'echo .*'
zsh:1: no matches found: .*
% bash -c 'echo .*'
. ..
> No filename generation pattern matches the files `.' or `..'.
… and I've just added another entry to my list of reasons as to why I love zsh.
$ mkdir foo
$ cd foo
$ touch 1
$ touch 2
$ touch 3
$ rm *
$ ls -la .
total 0
drwxr-xr-x 2 mike wheel 68 3 Sep 14:41 .
drwxrwxrwt 18 root wheel 612 3 Sep 14:41 ..Plus, it mentions . and .. as no-nos
Unix in the past was for the tough men...