As is always the way, there are multiple documents which seem to say much the same thing, but often have extra snippets of goodness in them. In this case, Sandeep, I think https://learn.microsoft.com/en-us/entra/identity/authentication/concept-password-ban-bad-on-premises#how-microsoft-entra-password-protection-works includes the fact that the DC agent will request a new copy of the policy if the existing one is older than an hour. So, I guess, if you have password set/change events relatively rarely (i.e. more than an hour apart), it will get a new policy each time, but if you have lots of events happening all the time, then you'll just get a new policy every hour.
The docs also say that if no policy is available, then passwords will be accepted unvalidated - however, what isn't clear is whether the DC will immediately discard a policy which is older than an hour. In other words, if it decides the current policy is old and it should get a new policy, but there's a problem with the proxy service, so can't get a new copy, will it the password with the old policy, or discard the old policy (because it is > 1 hour old) and accept the password without validation.