diff --git a/core/lib/Event/EventDispatcher.php b/core/lib/Event/EventDispatcher.php
index cf024a2..3871a04 100644
--- a/core/lib/Event/EventDispatcher.php
+++ b/core/lib/Event/EventDispatcher.php
@@ -60,34 +60,34 @@ final class EventDispatcher implements EventDispatcherInterface, DeferredEventPr
             throw new \LogicException('Cannot process deferred events for an inactive execution.');
         }
 
-        $processed = 0;
-        $deadline = microtime(true) + 1.0;
-        $deadlineExceeded = false;
-        $limitExceeded = false;
-        while (($event = array_shift($this->deferred[$executionId])) !== null) {
-            if ($processed >= 1000) {
-                $limitExceeded = true;
-                array_unshift($this->deferred[$executionId], $event);
-                break;
+        try {
+            $processed = 0;
+            $deadline = microtime(true) + 1.0;
+            $deadlineExceeded = false;
+            $limitExceeded = false;
+            while (($event = array_shift($this->deferred[$executionId])) !== null) {
+                if ($processed >= 1000) {
+                    $limitExceeded = true;
+                    array_unshift($this->deferred[$executionId], $event);
+                    break;
+                }
+                if (microtime(true) >= $deadline) {
+                    $deadlineExceeded = true;
+                    array_unshift($this->deferred[$executionId], $event);
+                    break;
+                }
+                $processed += $this->invoke($event, DeliveryMode::Deferred);
             }
-            if (microtime(true) >= $deadline) {
-                $deadlineExceeded = true;
-                array_unshift($this->deferred[$executionId], $event);
-                break;
-            }
-            $processed += $this->invoke($event, DeliveryMode::Deferred);
+
+            return new DeferredProcessingResult(
+                $processed,
+                count($this->deferred[$executionId]),
+                $deadlineExceeded,
+                $limitExceeded,
+            );
+        } finally {
+            $this->discardDeferred($executionId);
         }
-
-        $remaining = count($this->deferred[$executionId]);
-        unset($this->deferred[$executionId]);
-        $this->activeExecution = null;
-
-        return new DeferredProcessingResult(
-            $processed,
-            $remaining,
-            $deadlineExceeded,
-            $limitExceeded,
-        );
     }
 
     public function discardDeferred(string $executionId): void
diff --git a/tests/php/Unit/Event/EventDispatcherTest.php b/tests/php/Unit/Event/EventDispatcherTest.php
index 83606a1..ba4310c 100644
--- a/tests/php/Unit/Event/EventDispatcherTest.php
+++ b/tests/php/Unit/Event/EventDispatcherTest.php
@@ -167,6 +167,43 @@ final class EventDispatcherTest extends TestCase
         $dispatcher->dispatch(new Event('test.event'));
     }
 
+    #[Test]
+    #[TestDox('Propagated deferred failures close their execution scope')]
+    public function recoversFromDeferredFailure(): void
+    {
+        $registry = new EventListenerRegistry();
+        $registry->listen(
+            'test',
+            'test.event',
+            FailingListener::class,
+            'fail',
+            DeliveryMode::Deferred,
+            failurePolicy: FailurePolicy::Propagate,
+        );
+        $registry->freeze();
+
+        $dispatcher = new EventDispatcher(
+            $registry,
+            new RecordingContainer([FailingListener::class => new FailingListener()]),
+            new NullLogger(),
+        );
+        $dispatcher->beginExecution('failed');
+        $dispatcher->dispatch(new Event('test.event'));
+
+        try {
+            $dispatcher->processDeferred('failed');
+            self::fail('Expected deferred listener failure to propagate.');
+        } catch (\RuntimeException $error) {
+            self::assertSame('Listener failed.', $error->getMessage());
+        }
+
+        $dispatcher->beginExecution('next');
+        $result = $dispatcher->processDeferred('next');
+
+        self::assertSame(0, $result->processed);
+        self::assertSame(0, $result->remaining);
+    }
+
     #[Test]
     #[TestDox('Deferred processing stops at its configured count limit')]
     public function boundsDeferredWork(): void