does nginx (1.20 or newer) re-resolve DNS for proxy_pass?

This blog post explains the various methods NGINX and NGINX Plus handles domain resolution - https://www.nginx.com/blog/dns-service-discovery-nginx-plus/. To summarize, you can configure NGINX to resolve hostnames regularly using these methods (credits to original blog post):

1. Setting the Domain Name in a Variable

resolver 10.0.0.2 valid=10s;

server {
    location / {
        set $backend_servers backends.example.com;
        proxy_pass http://$backend_servers:8080;
    }
}

NGINX re‑resolves the domain name when its TTL expires. You must include the 

resolver

valid

resolver

Drawback is that because the upstream group is not used, specify the load‑balancing algorithm or other parameters to the server directive.

2. (NGINX Plus only) Using DNS A records

resolver 10.0.0.2 valid=10s;

upstream backends {
    zone backends 64k;
    server backends.example.com:8080 resolve;
}

server {
    location / {
        proxy_pass http://backends;
    }
}

By default, NGINX Plus honors the TTL, re‑resolving names when records expire. To have NGINX Plus instead re‑resolve names at a specified frequency, include the valid parameter to the resolver directive.

This gives the additional benefit of being able to configure additional settings for upstream servers via the server directive.

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Do take a look at the blog post to see other methods available, such as via DNS SRV records which supports dynamic port numbers and weightings. Hope that helps.