Weblogic remote EJB call is not doing fail-over out of the box and throwing UnknownHostException for one bad host

Question

I am calling a remote EJB on weblogic 12c. In the provider URL, i am setting many hosts like below:

Context.PROVIDER_URL,"t3://node1:7001,node2:7002,node3:7003"

Out of these many hosts, one host is bad and does not exist at all.

My understanding was that WebLogic will itself do the fail-over and move to the next working host. But even one host (order doesn't matter) is causing the below error while creating the Initial Context each time.

java.net.UnknownHostException: <BAD_HOST_NAME>
    at java.net.Inet4AddressImpl.lookupAllHostAddr(Native Method)
    at java.net.InetAddress$1.lookupAllHostAddr(InetAddress.java:922)
    at java.net.InetAddress.getAddressesFromNameService(InetAddress.java:1316)
    at java.net.InetAddress.getAllByName0(InetAddress.java:1269)
    at java.net.InetAddress.getAllByName(InetAddress.java:1185)
    at java.net.InetAddress.getAllByName(InetAddress.java:1119)
    at java.net.InetAddress.getByName(InetAddress.java:1069)
    at weblogic.rjvm.RJVMFinder.getDnsEntries(RJVMFinder.java:434)
    at weblogic.rjvm.RJVMFinder.findOrCreateInternal(RJVMFinder.java:217)
    at weblogic.rjvm.RJVMFinder.findOrCreate(RJVMFinder.java:169)
    at weblogic.rjvm.ServerURL.findOrCreateRJVM(ServerURL.java:177)
    at weblogic.jndi.WLInitialContextFactoryDelegate$1.run(WLInitialContextFactoryDelegate.java:342)
    at weblogic.security.acl.internal.AuthenticatedSubject.doAs(AuthenticatedSubject.java:365)
    at weblogic.security.service.SecurityManager.runAs(SecurityManager.java:146)
    at weblogic.jndi.WLInitialContextFactoryDelegate.getInitialContext(WLInitialContextFactoryDelegate.java:337)