The behavior of the TestStand - End Modal Dialog.vi should be changed. The current behavior is for it to not execute if an error occurred before it runs. Instead, it should always execute, even if an error occurred before it runs. With the current behavior, if an error gets passed to the VI, it can cause TestStand to hang. In general, close or end functions and VIs should always execute even if an error occurred before they run because unintended consequences such as errors, crashes, or hangs can happen if they don't execute. Yes, you can use the Clear Errors.vi before the TestStand - End Modal Dialog.vi and Merge Errors function to work around this behavior, but it would eliminate the need to do this if the behavior of the VI were changed.
