This is not a bug actually, because the extrinsic, even when failed, gets finalized. However, just like in subxt, we could provide a functionality check_success or similar. This function would then check the associated events of this call and check if there's been an ExtrinsicFailed event or ExtrinsicSuccess.

Example from subxt:

    /// Fetch the events associated with this transaction. If the transaction
    /// was successful (ie no `ExtrinsicFailed`) events were found, then we return
    /// the events associated with it. If the transaction was not successful, or
    /// something else went wrong, we return an error.
    ///
    /// **Note:** If multiple `ExtrinsicFailed` errors are returned (for instance
    /// because a pallet chooses to emit one as an event, which is considered
    /// abnormal behaviour), it is not specified which of the errors is returned here.
    /// You can use [`TxInBlock::fetch_events`] instead if you'd like to
    /// work with multiple "error" events.
    ///
    /// **Note:** This has to download block details from the node and decode events
    /// from them.
pub async fn wait_for_success(
        &self,
    ) -> Result<crate::blocks::ExtrinsicEvents<T>, Error> {
        let events = self.fetch_events().await?;

        // Try to find any errors; return the first one we encounter.
        for ev in events.iter() {
            let ev = ev?;
            if ev.pallet_name() == "System" && ev.variant_name() == "ExtrinsicFailed" {
                let dispatch_error =
                    DispatchError::decode_from(ev.field_bytes(), &self.client.metadata());
                return Err(dispatch_error.into())
            }
        }

        Ok(events)
    }

send_extrinsic(xt, XtStatus::Finalized) does not report error upon xt failure #288

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`send_extrinsic(xt, XtStatus::Finalized)` does not report error upon xt failure #288