> 2. Whenever a service retries but has to give up, the error it sends to its callers should never be retried. There has to be some agreement that that HTTP code will never be retried. This prevents the multiplicative factor of retry on top of retry, which is why those storms can generate so much load.

This can't really be tolerated in practice, though, because it means that one bad component somewhere in your stack, one that is able to accept and respond to requests but for whatever reason isn't able to make requests to its backends, poisons the whole stack. You can't take one backend's word for it that the failure is not localized and therefore retryable.