Answer
Check whether the Customer Order's Order Type has 'Online Processing' ticked in Sales Basic Data — this setting determines whether Release runs synchronously (online, in the same session, so the event fires and any error displays immediately) or asynchronously as a background job instead. For an Order Type without Online Processing ticked, Release runs as a background job, and the event's Error_SYS-triggered failure happens silently within that background job — visible only if you go looking at the failed background job's own log — rather than surfacing as an on-screen error to the user in real time. Ticking Online Processing for the relevant Order Type makes the event's error message display synchronously to the user as originally intended.