Yeah, it would. If the server returns a 503 to the caller when it's overloaded, the caller would move on to the next host, and if the server were taken out of service, then the call would move on to the next host.
The main difference is that only the calls for that host would move, and they would be distributed across multiple other hosts, instead of shifting the keyspace around, depending on what you are using for your HRW calculation to pick the server list.
The main difference is that only the calls for that host would move, and they would be distributed across multiple other hosts, instead of shifting the keyspace around, depending on what you are using for your HRW calculation to pick the server list.