How does load balancing and health checking work on Apigee TargetEndpoints?

<!-- TargetEndpoint with load balancing across 3 servers -->
<TargetEndpoint name="default">
  <HTTPTargetConnection>
    <LoadBalancer>
      <Algorithm>RoundRobin</Algorithm>  <!-- or: LeastConnections, Weighted, Random -->
      <Server name="backend-1"/>
      <Server name="backend-2"/>
      <Server name="backend-3">
        <Weight>2</Weight>  <!-- Receives 2x the traffic (Weighted algorithm) -->
      </Server>
      <!-- Health check / retry configuration -->
      <MaxFailures>5</MaxFailures>
      <RetryEnabled>true</RetryEnabled>
      <IsFallback>false</IsFallback>
    </LoadBalancer>
    <Path>/api/v1</Path>
  </HTTPTargetConnection>
  <!-- Active health checks (HealthMonitor) -->
  <HealthMonitor>
    <IsEnabled>true</IsEnabled>
    <IntervalInSec>5</IntervalInSec>
    <HTTPMonitor>
      <Request>
        <ConnectTimeoutInSec>2</ConnectTimeoutInSec>
        <SocketReadTimeoutInSec>2</SocketReadTimeoutInSec>
        <Verb>GET</Verb>
        <Path>/health</Path>
      </Request>
      <SuccessResponse>
        <ResponseCode>200</ResponseCode>
      </SuccessResponse>
    </HTTPMonitor>
  </HealthMonitor>
</TargetEndpoint>