Is it fair to say that if one machine in an NFS link goes down, the machine on the other end may well be affected?
Sorry, that statement deserves a "duuuuuh, Mr. Obvious."
When a NFS system goes down, anything depending on it won't be able to access it. But I have not heard of a system going down as a result of an inaccessable NFS mount. The system might have been depending on resources on the NFS mount, I suppose.
But in general, if a NFS system goes down, all the other systems lose is access to the other system. There's no reason for "The dev system went down, taking the prod system with it." If the production system is depending upon components in the dev system, someone should be fired. That implies the production system is depending upon dev components, which is pure wrong.