No it doesn't, you won't be able to log on. For this reason you should always configure Console access as Local as a safety net / fall back should TACACS fail. THen at least you can console in, change the auth to Local and use local accounts.
So in effect, you have to "manually fall back to local" - it isn't automatic.
A provider group is a set of providers that will be used by Cisco UCS during the authentication process. Cisco UCS Manager allows you to create a maximum of 16 provider groups, with a maximum of eight providers allowed per group.
During authentication, all the providers within a provider group are tried in order. If all of the configured servers are unavailable or unreachable, Cisco UCS Manager automatically falls back to the local authentication method using the local username and password.