I want to know under what conditions this error occurs in Verse.

According to the manual linked above your code is by default fully described as

<transacts><no_rollback> #only allowed in UEFN API 

So if there is an error there is no fallback on error so you will need

<decides><transacts>

Trying control-f to search with transacts

they all say

<decides><transacts>

There may be an error in your code which will now show up

see

IsPuzzleSolved()<decides><transacts> : void =
    CurrentState = PuzzleSolution # succeeds if CurrentState is equal to PuzzleSolution, and fails if not

Main() : void =
    if (IsPuzzleSolved[]):
        ItemSpawner.Enable()

In this code The function PuzzleSolution is now protected from runtime errors and is detected in

    if (IsPuzzleSolved[]):

This means you can print if an error occurs or carry on.

in the documentation above Control + F and search for the word transact

There are over 20 examples of the use of

<decides><transacts>

for many operations in Verse