Directive proxy_next_upstream doesn't work?

[defage]

nginx conf is:

http {
large_client_header_buffers             8 8k;

proxy_buffers                           8 8K;
proxy_buffer_size                       8K;

open_file_cache             max=1000 inactive=20s;
open_file_cache_valid       30s;
open_file_cache_min_uses    2;
open_file_cache_errors      on;


upstream backend {
    server 10.10.2.100:8088 max_fails=200 fail_timeout=10;
    server 10.10.2.101:8088 max_fails=200 fail_timeout=10;
    server 10.10.2.102:8088 max_fails=200 fail_timeout=10;
    server 10.10.2.103:8088 max_fails=200 fail_timeout=10;
}

server {
listen                                       80;
server_name                            _;
keepalive_timeout                    60;
proxy_set_header                     Host $http_host;

proxy_connect_timeout             10;
proxy_read_timeout                  10;
proxy_next_upstream                error http_500 http_502 http_503
http_504;
add_header                               P3P "CP=CAO PSA OUR";
add_header                               Cache-Control
"must-revalidate,no-cache,private";

location / {
    proxy_pass         http://backend;
}
}
}

On my production, in the cases a server of upstream response http_504,
but the request  doesn't to be transmitted to the next server, nginx
response http 504 to client.

Posted at Nginx Forum: http://forum.nginx.org/read.php?2,220648,220648#msg-220648