My question is, can the address-full-policy be set to FAIL for Address1 on each of the B..Z nodes...
...and can an exception be propagated to the producer connected to NodeA when the address fills up on one of the B..Z nodes?
No. Once the message arrives on the destination on node A it is completely disassociated from the producer that sent it. There is no way to propagate an exception back to its producer like you want.
You confirmed my suspicion. Thank you Justin for your reply!