I was in the process of creating the screenshots you requested when I made a new discovery.
I typically have three "Level 0" servers active all at once. One paid server and two free servers. I use 12 connections, 10 to the paid server and then 1 each to the two free servers. The free servers have limited retention, so when I download something older I always right-click the two free server threads in the connection panel and select "Disable thread".
The nzb I was using to document this issue is older than the retention of the free servers, so in order to make a cleaner screenshot - I unselected the two free servers (from Setup > Servers Option) and only had the paid server active.
And then I found that when I only have the one active server (10 connections), the retry count works correctly.
So, I added back in the two free servers (1 connection each), disabled the free server threads, and sure enough - the retry stops working.
And once it goes through and gives up on all the the broken rars and quits trying (with partially downloaded rars just sitting in the queue) - If I enable the disabled download threads, it goes back to working properly & eventually decodes the partial rars. This is certainly not how it worked in 0.39.4. Disabling the other server threads didn't make any difference in that version.
I can still make the screenshots if you like, but with this new info are they still needed?