I cant recall exact setting now in web UI, but make sure in VTI settings that peer name (I believe is option when configuring VTI) is EXACTLY the same as what you gave it for interoperable object for both members, because if not, it will never work properly when there is a failover.
Also, static route to Azure side would use default gateway that is IP on Azure side net thats not in use. So say if your master has vti ip 169.254.10.55 and other one is 169.254.10.56, then vip can be say .57 and default gateway to reach azure can be say .60, as long as its not used anywhere on Azure side.
Message me offline if you need help, I can check this for customer we did it between on prem and cloud for few tunnels and works fine with failover and also its all route based with VTIs. Also, MAKE SURE that default gateway I was referring to is the SAME ip address as what you have when you edit topology for VTI and then under remote address field under vpn tunnel tab (2nd from the top on the left).
Andy