In case of your example, client access will fail.
Policy rule evaluation is aborted when the processing rule has unresolvable host name.
If client access matches any rule before that point and cDOT does not affected by bug ID 891293,cDOT does not attempt further evaluation and client access will be accepted as it is.
But in version of cDOT affected by bug ID 891293, cDOT does not stop policy evaluation operation at the point of matched rule.
http://mysupport.netapp.com/NOW/cgi-bin/bol?Type=Detail&Display=891293
Above page only mention to delay. But unresolvable host name brings access failure in conjunction with this bug.
Later rule will be also processed, and if any later rule has unresolvable host name, evaluation process is aborted and the result of previous rules is discarded. Client access fails by such reason.