Out of the box IIS, without adjustments has some limitations.
In your machine.config increase.
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<processModel requestQueueLimit="100000" maxWorkerThreads="100" maxIoThreads="100" minWorkerThreads="50" minIoThreads="50" />
in the registry you can increase..
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reg add HKLM\System\CurrentControlSet\Services\HTTP\Parameters /v MaxConnections /t REG_DWORD /d 1000000
in your applicationhost.config
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appcmd.exe set config /section:serverRuntime /appConcurrentRequestLimit:100000
You need to line up everything, you also need to change the application pool it runs under and increase that as well.
By making the queue length higher.
500 users shouldn't trigger this, because that's more like 1k simultaneous connections, normally the default out of the box is configured to 5000.
But, if you're running other things on the server, you might hit those limits.