Can someone explain me this irule

This server 147.249.172.37 is behind firewall and now the policy on the firewall that allows LB to server traffic is getting 1000s of hits in a minute. Is it due to this irue ??

It very well could be, but I think it would also depend on the state of the pool members. Try adding a log statement to this iRule to see if that truly is getting triggered:

when LB_FAILED {
    log local0. "LB failed to server"
    LB::reselect node 147.249.172.37 8100         
}