If a port is not available, the simulator should either change port automatically or give an error message and abort. I believe the latter is the most feasible approach, and also the behavior a user would expect.
For some reason 127.0.1.1 does not work for machines with static IP on Windows. User needs to specify the actual IP instead. If 127.0.1.1 is used, simulation will just fail to connect with very long timeouts and no useful feedback to the user.