Have just been racing with the FOX with a full sever, some great racing full of well-known LFS racers.

Then the server lost the connection to the master host.

That made me to wonder what makes this happen?

Sorry if this a bit of a noobie question but seemed rather out of the blue to me!

Could be anything. Either the master host went down for a little while (I've not checked the graph, and cant be bothered), or there was a communication problem between the server and the master host. This could be a router going down, or a line being physically severed, anything. It could even be extreme lag or packet loss between server - master server.