GTM load balancing with generic hosts

Hello I have a simple setup - A wip - pool and pool has 2 generic hosts. At the pool level I just have "Global Availability" as my lb method. The Alternate and fall back lb methods are set to "None". If both the hosts are down and I do a nslookup against the GTM listener I am getting both the ip's back as response. Why is that? I assumed that was possible only if "Return to DNS" is in play? What am I missing here? Can you guys help me understand.