Yep, it is inconsistent: $ ( set -e; foo() { f=$(false); }; foo ; ); echo $? 1 $ ( set -e; foo() { local f=$(false); }; foo ; ); echo $? 0

Yep, it is inconsistent: $ ( set -e; foo() { f=$(false); }; foo ; ); echo $? 1 $ ( set -e; foo() { local f=$(false); }; foo ; ); echo $? 0 $ ( set -e; foo() { local f; f=$(false); }; foo ; ); echo $? 1 However, it is still better to use -e to catch errors early.