First, let's level-set with a couple of points here:
- A DP and an MCC are not in any way the same thing. They happen to be hosted on the same server, but that's it. They do not share content; they do not share anything. They are two completely separate and independent components. Thus, when you talk about DO, DPs are irrelevant (and when you talk about ConfigMgr content, MCCs are irrelevant).
- Clients either are or not configured to use an MCC. Per the docs, the client must also be enabled for group mode in DO but the UI doesn't enforce this. I can't say I've tested what happens if you don't configure this so don't know if it will work or not.
- If configured to use an MCC, clients will/can only use an MCC hosted on a site system in the same boundary group as the client.
Behaviour when DP in a boundary group is NOT enabled with Connected Cache. Does Client start downloading content from other clients?
Yes, that's the entire point of enabling DO.
Behaviour when content is not there in a DP enabled with connected cache (due to any reason), does it start downloading content from other clients in the network?
As noted, DP content is irrelevant so assuming you mean MCC content here. If so, then no. The entire point of the MCC is to request content on behalf of the client from the CDN. If the MCC does not respond to a client's request, it will fall back to standard client based DO though.
What happens when a Client is configured to download update from Microsoft when content is not available in DP?
This one is a bit tricky because as noted, DP and DO are two different things and two different paths for the client to take to get content. I believe that the setting noted for going directly to Microsoft, will override the client's use of any other method and will do as its name implies thus offering a third path to get the content (directly from WU).
Most of this is well covered in the official docs btw: https://learn.microsoft.com/en-us/mem/configmgr/core/plan-design/hierarchy/microsoft-connected-cache