Post-merge: `LedgerApiError::BeneficiaryNotFound` was added on `main`
(#1359). The flattened `From<LedgerApiError> for Error<T>` impls in
`cnight-observation` and `midnight-system` need a matching arm now that
they enumerate variants explicitly rather than wrapping the whole type.

Signed-off-by: Oscar Bailey <79094698+ozgb@users.noreply.github.com>

* feat(ledger): surface nested error variants in flat ledger error enums

Variants like MalformedTransaction::EffectsCheckFailure(EffectsCheckError)
were previously collapsed to a single flat code, hiding the inner cause
from end-users. Flatten the inner enums (EffectsCheckError,
SequencingCheckError, DisjointCheckError, FeeCalculationError,
MalformedContractDeploy, TransactionApplicationError, zswap MalformedOffer
and TransactionInvalid) into granular variants in InvalidError,
MalformedError, and SystemTransactionError, with stable u8 codes in the
free 212-250 range.

Add version-specific error_ext modules (versions/error_ext/ledger_7.rs,
ledger_8.rs) wired through lib.rs in the same style as block_context. Each
version maps only the variants it knows about; unknown variants fall
through to UnknownError + log rather than being silently misclassified.
This replaces the prior '_ => Ste::MerkleTreeError' pattern, which would
have masked any future ledger 9+ additions as MerkleTreeError.

Adds InvalidError variants for ledger 8's MerkleTreeError (top-level and
zswap-nested) and DivideByZero (present in both versions).

Signed-off-by: Oscar Bailey <79094698+ozgb@users.noreply.github.com>

* fix: add missing error fallback warning log

Signed-off-by: Oscar Bailey <79094698+ozgb@users.noreply.github.com>

* chore: add change files for granular ledger error codes

Covers both the node-side host conversion changes and the runtime-side
pallet error variants exposed to end-users. Runtime metadata rebuild is
required as a result of the new variants.

Fixes: midnightntwrk#1374
Signed-off-by: Oscar Bailey <79094698+ozgb@users.noreply.github.com>

* chore: change file Fixes -> Helps with for issue 1374

Granular error codes don't resolve the underlying issue, just make it
easier to debug.

Signed-off-by: Oscar Bailey <79094698+ozgb@users.noreply.github.com>

* docs: update change files with PR links

Signed-off-by: Oscar Bailey <79094698+ozgb@users.noreply.github.com>

* docs: update comments

Signed-off-by: Oscar Bailey <79094698+ozgb@users.noreply.github.com>

* chore: rebuild metadata

* feat(ledger): nest granular ledger error variants

Replace flattened variant names like `EffectsCheckRealCallsSubsetCheckFailure`
with nested wrappers like `MalformedError::EffectsCheck(EffectsCheckErrorCode::RealCallsSubsetCheckFailure)`.
Variant names now mirror upstream `mn_ledger` types directly. Each sub-enum
gets its own 256-variant budget, and the compile-time `MAX_MODULE_ERROR_ENCODED_SIZE`
check enforces correctness.

Flatten `LedgerApiError` into `cnight-observation::Error<T>` and
`midnight-system::Error<T>` (mirroring the `midnight` pallet pattern).
The previous `Error::LedgerApiError(LedgerApiError)` wrapper added an extra
byte that, combined with the new nesting, exceeded the 4-byte module error
budget.

u8 codes via `From<LedgerApiError>` are preserved for all reachable variants.
Two fallback paths now produce more specific bytes: unmapped upstream
ZswapTransactionInvalid -> 103 (was 109) and unmapped MalformedOffer -> 127
(was 139), reusing what were previously vestigial flat catch-all bytes.

SCALE pallet error encoding for granular variants changes shape: e.g.
`Error::Transaction(Malformed(EffectsCheck(RealCallsSubsetCheckFailure)))`
is 4 bytes vs the previous 3-byte flat encoding.

Signed-off-by: Oscar Bailey <79094698+ozgb@users.noreply.github.com>

* feat(ledger): reserve retired u8 error codes

Codes 168, 182, 186, 187, 188, 193, 205 were assigned to flat catch-all
variants (`MalformedError::FeeCalculation` etc.) on `main` and were
observable to mempool clients via `InvalidTransaction::Custom`. They are
no longer produced by the nested encoding, but reusing them for new
variants would silently collide on the wire.

Document the reservation in `RETIRED_U8_ERROR_CODES` and assert at test
time that no `LedgerApiError` value encodes to one of them.

Signed-off-by: Oscar Bailey <79094698+ozgb@users.noreply.github.com>

* fix(pallets): handle BeneficiaryNotFound in wrapper Error conversions

Post-merge: `LedgerApiError::BeneficiaryNotFound` was added on `main`
(midnightntwrk#1359). The flattened `From<LedgerApiError> for Error<T>` impls in
`cnight-observation` and `midnight-system` need a matching arm now that
they enumerate variants explicitly rather than wrapping the whole type.

Signed-off-by: Oscar Bailey <79094698+ozgb@users.noreply.github.com>

* chore: rebuild metadata

---------

Signed-off-by: Oscar Bailey <79094698+ozgb@users.noreply.github.com>
Co-authored-by: github-actions[bot] <41898282+github-actions[bot]@users.noreply.github.com>