Loud Failures, Quiet Failures: Fault Detection and Recovery in Tool-Using Language Model Agents

Obada Kraishan

Tool-using agents are usually scored on whether they finish a task while the tools work. Deployments are less forgiving: services time out, endpoints disappear, parameter names change, and results come back well formed but wrong. Prior work has shown that language models over-trust tool outputs that fail silently; we ask how that over-trust plays out across the stages of failure handling in multi-turn agents. Wrapping the executable environments of an established function-calling benchmark in a fault-injection layer, we inject one of four typed faults at a controlled point in the trajectory and record whether the agent notices, changes plan, recovers the task, or repeats itself. Six models from three families, half of them reasoning variants, ran 1,920 trials over 24 multi-step tasks. Agents treat a failure as a problem in 91.3% of trials when the tool returns an explicit error, but in 58.8% of trials when it returns a plausible wrong value, against a 26.8% rate of reporting problems when nothing was wrong. Reasoning models are not better placed: paired against instruct siblings, they notice less (-9.3 points, p < .001) and change plan more (+10.4 points, p < .001), and recovery…