refined the logic

porch/pkg/engine/engine.go

@@ -403,10 +403,6 @@ func (cad *cadEngine) UpdatePackageResources(ctx context.Context, repositoryObj
 			newResources: new,
 			oldResources: old,
 		},
-		&renderPackageMutation{
-			renderer: cad.renderer,
-			runtime:  cad.runtime,
-		},
 	}
 
 	apiResources, err := oldPackage.GetResources(ctx)
@@ -416,11 +412,24 @@ func (cad *cadEngine) UpdatePackageResources(ctx context.Context, repositoryObj
 	resources := repository.PackageResources{
 		Contents: apiResources.Spec.Resources,
 	}
-	renderResult, err := applyResourceMutations(ctx, draft, resources, mutations)
-	if err != nil {
-		return nil, renderResult, err
+	if _, err := applyResourceMutations(ctx, draft, resources, mutations); err != nil {
+		return nil, nil, err
 	}
 
+	renderResult, err := applyResourceMutations(ctx,
+		draft,
+		resources,
+		[]mutation{&renderPackageMutation{
+			renderer: cad.renderer,
+			runtime:  cad.runtime,
+		}})
+	if err != nil {
+		// render failed on the package but we won't fail the overall
+		// update operation. Instead, we will continue with saving the draft with
+		// original incoming resources. Clients will examine the status
+		// which will contain renderResult for graceful handling.
+		err = nil
+	}
 	// No lifecycle change when updating package resources; updates are done.
 	updatedRev, err := draft.Close(ctx)
 	return updatedRev, renderResult, err
@@ -432,12 +441,12 @@ func applyResourceMutations(ctx context.Context, draft repository.PackageDraft,
 	var renderResult *fnresult.ResultList
 	for _, m := range mutations {
 		applied, taskResult, task, err := m.Apply(ctx, baseResources)
-		if err != nil {
-			return renderResult, err
-		}
 		if taskResult != nil && taskResult.Type == api.TaskTypeEval {
 			renderResult = taskResult.Render
 		}
+		if err != nil {
+			return renderResult, err
+		}
 		if err := draft.UpdateResources(ctx, &api.PackageRevisionResources{
 			Spec: api.PackageRevisionResourcesSpec{
 				Resources: applied.Contents,