Here's my test setup.
I have a group that contains three proxy repositories in this order:
I've run a build against the system so that repository "C" contains all the artifacts needed for my build.
I bring down the remote for repository "A", and then attempt to access it so it becomes auto-blocked.
Running the build again shows no outbound network activity from Nexus.
Then I bring the remote for "A" back on line.
Running the build again shows network requests to the remotes for "A" and "B" for every artifact in the build.
NEXUS-3832 Nexus looks in remote repositories for release artifacts which are already cached locally.