I do not understand your description of your situation and am not sure what your problem really is.
The title of your question sounds like you want a backup method of authentication when TACACS is not working. But the configuration example that you include does not use TACACS at all. This configuration will control authentication for anyone accessing the router via vty and will only do local authentication. Local authentication depends on having a listing of user names and passwords on the local router. If the router does not have this list of user names and passwords then authentication will fail.
If you want to use TACACS as primary and local as backup then the configuration might look something like this:
aaa authentication login loginlocal group tacacs+ local
If this does not adequately answer your question then please clarify your situation and the problem that you are trying to solve.
HTH
Rick
HTH
Rick