If a Power Automate Flow gets to its ending point, it is assumed to have worked. In order to (in programming parlance) throw an error, you must use the Terminate Action.

In the Child Flow

Make sure that you set the Status to “Failed”:

In the Parent (calling) Flow

Make sure that you have an error path in your parent Flow:

The problem is that if you ‘return’ a failure, and you are calling the child Flow from a parent, the Flow will be retried according to the settings of the Run a Child Flow Action, meaning you’re not going to get an immediate response from the child Flow even if you know that no matter how many times you try, it isn’t going to work.

You can avoid this by using the Settings option and setting the Retry Policy to “None”:

This results in an immediate failure, allowing you to handle the error without waiting for pointless retry cycles.

It also maintains the success reporting elsewhere in Power Platform: