By using classical molecular dynamics simulations and a novel technique to identify defects based on the calculation of atomic strain, we have elucidated the detailed mechanisms leading to the anomalous generation and growth of {001} loops found after ultra-fast laser annealing of ion-implanted Si. We show that the building block of the {001} loops is the very stable Arai tetra-interstitial [N. Arai, S. Takeda, M. Kohyama, Phys. Rev. Lett. 78, 4265 (1997)], but their growth is kinetically prevented within conventional Ostwald ripening mechanisms under standard processing conditions. However, our simulations predict that at temperatures close to the Si melting point, Arai tetra-interstitials directly nucleate at the boundaries of fast diffusing selfinterstitial agglomerates, which merge by a coalescence mechanism reaching large sizes in the nanosecond timescale. We demonstrate that the crystallization of such agglomerates into {001} loops and their subsequent growth is mediated by the tensile and compressive strain fields that develop concurrently around the loops. We also show that further annealing produces the unfaulting of {001} loops into perfect dislocations. Besides, from the simulations we have fully characterized the {001} loops, determining their atomic structure, interstitial density and formation energy.