Internet Explorer Proxy Caching
Internet Explorer by default caches the result from the function for that given host - it is known as the Automatic Proxy Result Cache. This results in less calls to the FindProxyForURL() function and may speed up browsing but it has a number of implications.
Users who deploy proxy autoconfiguration files for loadbalancing, failover or implementing multiple proxy selection or DIRECT fall-through. There is a documented workaround.
This isn't known to be a problem with other web browsers.
Internet Explorer records the chosen proxy server (or DIRECT? should verify -adrian) from a call to FindProxyForURL() against the hostname part of the URL. It then uses this for further URL accesses whose hostname matches the cached entry. If the proxy server then fails Internet Explorer will return a "Page can not be displayed" error.
There has been another report that some versions of Internet Explorer may detect a failed proxy and failover, but will not fail back to the original proxy until the Internet Explorer process has terminated and is restarted.
Microsoft has published a Tech Note article on this behaviour and explains how to disable the behaviour via Group Policy and Registry modifications. Please read the article for further information.
Update Microsoft article about IE caching of wpad\wpac and how to disable it via Registry or Group policy (applies for Windows 7-10+) https://support.microsoft.com/en-sg/help/271361
Microsoft Tech Note article: http://support.microsoft.com/?scid=kb%3Ben-us%3B271361&x=14&y=15