Properly report HasLoggedErrors when converting errors into warnings

src/Build.UnitTests/WarningsAsMessagesAndErrors_Tests.cs

@@ -417,6 +417,9 @@ public void TaskReturnsFailureButDoesNotLogError_ShouldCauseBuildFailure()
             }
         }
 
+        /// <summary>
+        /// Test that a task that returns false without logging anything reports MSB4181 as a warning.
+        /// </summary>
         [Fact]
         public void TaskReturnsFailureButDoesNotLogError_ContinueOnError_WarnAndContinue()
         {
@@ -439,6 +442,31 @@ public void TaskReturnsFailureButDoesNotLogError_ContinueOnError_WarnAndContinue
             }
         }
 
+        /// <summary>
+        /// Test that a task that returns false after logging an error->warning does NOT also log MSB4181
+        /// </summary>
+        [Fact]
+        public void TaskReturnsFailureAndLogsError_ContinueOnError_WarnAndContinue()
+        {
+            using (TestEnvironment env = TestEnvironment.Create(_output))
+            {
+                TransientTestProjectWithFiles proj = env.CreateTestProjectWithFiles($@"
+                <Project>
+                    <UsingTask TaskName = ""CustomLogAndReturnTask"" AssemblyName=""Microsoft.Build.Engine.UnitTests""/>
+                    <UsingTask TaskName = ""ReturnFailureWithoutLoggingErrorTask"" AssemblyName=""Microsoft.Build.Engine.UnitTests""/>
+                    <Target Name='Build'>
+                        <CustomLogAndReturnTask Return=""false"" ErrorCode=""MSB1234"" ContinueOnError=""WarnAndContinue""/>
+                    </Target>
+                </Project>");
+
+                MockLogger logger = proj.BuildProjectExpectSuccess();
+
+                // The only warning should be the error->warning logged by the task.
+                logger.WarningCount.ShouldBe(1);
+                logger.AssertLogContains("MSB1234");
+            }
+        }
+
         [Fact]
         public void TaskReturnsFailureButDoesNotLogError_ContinueOnError_True()
         {

src/Build/BackEnd/Components/RequestBuilder/TaskHost.cs

@@ -455,8 +455,9 @@ public void LogErrorEvent(Microsoft.Build.Framework.BuildErrorEventArgs e)
                 {
                     e.BuildEventContext = _taskLoggingContext.BuildEventContext;
                     _taskLoggingContext.LoggingService.LogBuildEvent(e);
-                    _taskLoggingContext.HasLoggedErrors = true;
                 }
+
+                 _taskLoggingContext.HasLoggedErrors = true;
             }
         }