@@ -295,9 +295,34 @@ def _run_init(
             # steps.<id>.output.stderr for error details.
             stderr = stdout if result.exit_code != 0 else ""
 
-        if result.exit_code != 0 and result.exception is not None:
+        # Record the exception only for an UNEXPECTED crash. ``typer.Exit(n)``
+        # -- how ``specify init`` reports every ordinary failure -- surfaces
+        # through ``CliRunner`` as ``result.exception = SystemExit(n)``, so this
+        # branch used to fire on routine errors too. ``init`` prints its
+        # diagnostics through Rich to stdout, leaving ``result.stderr`` empty,
+        # so the synthesized "SystemExit: 1" became the whole of ``stderr`` and
+        # preempted ``execute``'s ``stderr.strip() or stdout.strip()`` fallback.
+        # Every failing init step then reported ``error: 'SystemExit: 1'`` while
+        # init's real message -- e.g. the list of valid integrations for a
+        # typo'd ``integration:`` -- sat unread in stdout.
+        if (
+            result.exit_code != 0
+            and result.exception is not None
+            and not isinstance(result.exception, SystemExit)
+        ):
             detail = f"{type(result.exception).__name__}: {result.exception}"
             stderr = f"{stderr}\n{detail}".strip() if stderr else detail
+        elif result.exit_code != 0 and not stderr.strip():
+            # Ordinary failure with no real stderr: under click >= 8.2 the
+            # streams are separate and ``init`` prints its diagnostics through
+            # Rich to stdout, so ``result.stderr`` is genuinely empty. Merely
+            # dropping the synthesized "SystemExit: 1" would leave
+            # ``steps.<id>.output.stderr`` empty -- still no diagnostic for a
+            # downstream step to read, and still contrary to the contract above
+            # ("treat stdout as stderr so workflows can consistently read
+            # steps.<id>.output.stderr for error details"). Carry the captured
+            # output across, matching what the older-Click branch already does.
+            stderr = stdout.strip()
 
         return (result.exit_code, stdout, stderr)
 
 
@@ -3150,6 +3150,80 @@ def test_invalid_integration_fails(self, tmp_path):
         assert result.output["exit_code"] != 0
         assert result.error is not None
 
+    def test_failed_init_surfaces_inits_own_message(self, tmp_path):
+        """A failing init step must report init's diagnostics, not 'SystemExit: 1'.
+
+        `typer.Exit(n)` — how `specify init` reports every ordinary failure —
+        surfaces through `CliRunner` as `result.exception = SystemExit(n)`, so
+        the unexpected-crash branch fired on routine errors too. `init` prints
+        through Rich to stdout, leaving `result.stderr` empty, so the
+        synthesized "SystemExit: 1" became the whole of stderr and preempted
+        the `stderr.strip() or stdout.strip()` fallback — stranding the real
+        message (here, the list of valid integrations) in stdout.
+        """
+        from specify_cli.workflows.step.init import InitStep
+        from specify_cli.workflows.base import StepContext, StepStatus
+
+        result = InitStep().execute(
+            {
+                "id": "bootstrap",
+                "here": True,
+                "integration": "no-such-agent",
+                "script": "sh",
+            },
+            StepContext(project_root=str(tmp_path)),
+        )
+
+        assert result.status == StepStatus.FAILED
+        assert result.error is not None
+        assert result.error.strip() != "SystemExit: 1"
+
+        # The real diagnostic reaches the caller...
+        collapsed = " ".join(result.error.split())
+        assert "no-such-agent" in collapsed or "Unknown" in collapsed, collapsed
+
+        # ...and reaches a downstream step reading steps.<id>.output.stderr.
+        # Asserting only "not the old sentinel" was too weak: an EMPTY stderr
+        # satisfies that while still carrying no diagnostic at all, which is
+        # exactly what dropping the synthesized detail left behind under
+        # click >= 8.2 (separate streams, init prints through Rich to stdout).
+        stderr = " ".join(result.output["stderr"].split())
+        assert stderr, "output.stderr must not be empty for a failed init"
+        assert stderr != "SystemExit: 1"
+        assert "no-such-agent" in stderr or "Unknown" in stderr, stderr
+
+    def test_unexpected_crash_still_reports_its_exception(self, monkeypatch, tmp_path):
+        """The branch's original purpose is preserved for a genuine crash.
+
+        Only `SystemExit` is now excluded; any other exception escaping the
+        runner must still be surfaced, since nothing else would describe it.
+        """
+        from specify_cli.workflows.step.init import InitStep
+        import typer.testing
+
+        class _Result:
+            exit_code = 1
+            output = ""
+            stderr = ""
+            exception = RuntimeError("boom inside init")
+
+        class _Runner:
+            def __init__(self, *a, **k):
+                pass
+
+            def invoke(self, *a, **k):
+                return _Result()
+
+        monkeypatch.setattr(typer.testing, "CliRunner", _Runner)
+
+        from specify_cli.workflows.base import StepContext
+
+        _code, _stdout, stderr = InitStep()._run_init(
+            ["init", "demo"], StepContext(project_root=str(tmp_path))
+        )
+
+        assert "RuntimeError: boom inside init" in stderr
+
     def test_non_empty_current_dir_without_force_fails_fast(self, tmp_path):
         from specify_cli.workflows.step.init import InitStep
         from specify_cli.workflows.base import StepContext, StepStatus