In my experience, with Splunk v5.0.x, there is no explicit time for which the search head and peers continue to work after a master goes down. I've had them continue to work, but also had them fail in under a half hour. As the document says, "treat a downed master as a serious failure" and start fixing the problem immediately.
Also, with Splunk v5.0.x, I've found that bringing the master back online may put the cluster in a bad state for a while.
The most common problems I've seen when a master is down is that searches return incomplete data; however, I've also see a cluster become completely unsearchable.
In my experience, v5 handles clustering very poorly. I highly recommend you upgrade to v6.
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