I think it's working as intended. It puts a few minutes between log-in attempts by their customers instead of a few seconds. It's a bad solution to the issue of congestion, considering that the only reason people make multiple login attempts is because the game is not queuing people... but the fact that the error numbers cycle like that seems to be by design rather than actual errors.

If any of the people handling the servers are reading this, the solution to stabilize the servers is to let people queu up on every login into a world. People will wait their turn. But if you make it seem like it's a random error, people are going to keep trying to log in until they get 'lucky'.