One interesting observation

I put this code

location /test {
proxy_pass http://a/;
....
set $dont_cache 1;

if ( $cookie_route ) {
set $dont_cache 0;
}
proxy_cache_bypass $dont_cache;
proxy_no_cache $dont_cache;

}

and it started to dis-honour the trailing slash http://a/ With the end / it does not look for /test but only due to the if block it started to look for it.

Regards
Amod