The different methods PowerShell exposes to terminate a script are not entirely consistent.

When throw is used to raise a terminating error, it will stop the current script and anything which called it. In the following example, child2 will never execute:

$ErrorActionPreference = 'Continue' 
function caller { 
    child1 
    child2 
} 
function child1 { 
    throw 'Failed' 
    'child1' 
} 
function child2 { 
    'child2' 
} 
caller 

When the ThrowTerminatingError method is used, processing within child1 stops, but the function caller continues. This is demonstrated as follows:

function caller { 
    child1 
    child2 
} 
function child1 { 
    [CmdletBinding()] 
    param ( ) 
 
    $errorRecord = New-Object Management.Automation.ErrorRecord( 
        (New-Object Exception('Failed')), 
        'ID', 
        'OperationStopped', 
        $null 
    ) 
    $pscmdlet.ThrowTerminatingError($errorRecord) 
    'child1' 
} 
function child2 { 
    'child2' 
} 

Executing the function caller shows that child2 is executed:

child1 : Failed
At line:2 char:5
+ child1
+ ~~~~~~
+ CategoryInfo : OperationStopped: (:) [child1], Exception
+ FullyQualifiedErrorId : ID,child1
child2

The behavior of the preceding example is equivalent to the behavior seen when calling Cmdlets. For example, the command ConvertFrom-Json raises a terminating error when the content it is asked to convert is invalid.

When a Cmdlet throws a terminating error within another function, the caller script continues to execute unless ErrorAction is set to Stop:

function caller { 
    ConvertFrom-Json -InputObject '{{' 
    child1 
} 
function child1 { 
    'Called' 
} 
caller 

The same behavior is seen when calling .NET methods, shown as follows. The static method IPAddress.Parse will raise a terminating error because the use of the method is not valid:

function caller { 
    [IPAddress]::Parse('this is not an IP') 
    child1 
} 
function child1 { 
    'Called' 
} 
caller