I booted up a couple virtual machines in an attempt to reproduce your problem. Here are the two lines from my servers.ini after adding them to the server list (why do they differ from yours?). I'm able to connect to each using /server znc1 and /server -m znc2
n0=znc2SERVER:mint:+9000:memnoch/arch:passwordGROUP:znc2
n1=znc1SERVER:mint:+9000:memnoch/localhost:passwordGROUP:znc1
Did you specify a group for each? If you have the same server addresses without a group, I wouldn't be surprised if mIRC tried to connect to each in turn. I don't think DNS is involved.
When I disconnect the znc server, each connection is disconnected and the treebar text changes from the server name back to zn1 and znc2. On reconnect in a debug window I see the proper password field passed to each connection. I have not seen either connection switch to the other.
