Organizations: Nanyang Technological University, Singapore · National University of Singapore, Singapore · CFAR, Agency for Science, Technology and Research, Singapore · IHPC, Agency for Science, Technology and Research, Singapore · Department of Statistics and Operations Research, UNC-Chapel Hill, United States · Carnegie Mellon University, United States
Tool-augmented agents are typically evaluated by their gains under reliable external feedback. Yet these gains leave open a key counterfactual: when feedback is unreliable, would the agent be better off receiving no task evidence? We study this question with a controlled matched-loop comparison that fixes the agent loop, prompt, action space, and decoding, while varying only the returned observation: faithful, misleading, or absent. Across question answering and fact verification, persistent misleading feedback produces a value inversion: agents that benefit from clean tools can perform worse than the matched no-feedback fallback. On HotpotQA, Qwen2.5-7B reaches 44.8 F1 with clean retrieval and 22.3 F1 with no feedback, but drops to 4.7 F1 under shuffled retrieval. The inversion persists under stronger clean retrieval and locally plausible distractors, but weakens when later clean evidence can repair the trajectory. Early trajectory signals predict many failures, yet simple repairs remain fallback-limited: rejecting bad evidence helps only when the exposed fallback is reliable. These results show that clean-tool gains can overstate tool value, and that matched no-feedback fallback controls are necessary for evaluating tool-augmented agents.
Tool calling is central to modern language model agents, but aggregate benchmark scores often hide where tool use fails. A model that never calls a needed tool and a model that calls the tool but ignores the result can look similar under final task accuracy. We introduce ToolFailBench, a diagnostic benchmark for measuring tool-use failures across 1,000 tasks in finance, medicine, law, cybersecurity, and real estate. Tool-required tasks return values the model wouldn't guess, forcing it to trust the tool while control tasks attach the same tools but should be answered directly. We label each trace with Tool-Skip, Result-Ignore, Output-Fabrication, and Unnecessary-Tool-Use, using a rule classifier and two LLM judges aggregated by majority vote. Across 19 headline models, the best reaches 86.33% Clean Tool-Use Rate, showing that faithful tool use is not saturated. More importantly, models with similar aggregate scores fail in different ways: most stay disciplined on no-tool controls, while Llama-3.1 models show an Always-Call pattern, and at the same parameter scale Llama-3.1-70B and Qwen2.5-72B differ by 89 percentage points on control-task accuracy. Tool-use evaluation should measure not only whether agents call tools, but whether they use tool outputs correctly and avoid tools when none is needed.
Tool-augmented language models are evaluated on whether they reach the right answer, not on whether they report honestly when a tool fails to supply one. We isolate this post-failure decision with a benchmark of 1,024 items spanning 16 internal-system domains and eight tool-failure types, in which a tool call is enforced and the returned payload is guaranteed to be unusable. Under a deployment-style system prompt, 14.10% of responses are dishonest: the model either asserts a value the payload cannot support or declines while citing a fabricated policy or capability limit. The rate is governed almost entirely by whether the failure is signalled. When the tool returns status:error, dishonesty is absent (0.0%); when it returns status:ok with a redacted, corrupted, stale, malformed, empty or truncated value, dishonesty reaches 45.3%. The behaviour is not an artefact of our prompts: it appears under a neutral prompt (10.17%) and under the shipped prompt of every production agent framework we evaluate, reaching 24.67% under CrewAI's, and none of the nine frameworks we audit specifies what the model should do when a tool fails. Comparing prompt-level defences, we find that the operative variable is not deference to tool output but the absence of a named failure state. Appending a single sentence that requires the model to emit retrieval_status: OK or FAILED before answering reduces dishonesty from 14.10% to 0.87%, with one item of 688 worsening against 92 improving, and transfers unchanged into three foreign agent scaffolds. The emitted flag is faithful in 99.7-99.9% of declarations, giving a runtime detector that needs only a regular expression.
Tool-calling agents are evaluated on tool selection, parameter accuracy, and scope recognition, yet LLM trajectory assessments remain inherently post-hoc. Disconnected from the active execution loop, such assessments identify errors that are usually addressed through prompt-tuning or retraining, and fundamentally cannot course-correct the agent in real time. To close this gap, we move evaluation into the execution loop at inference time: a specialized reviewer agent evaluates provisional tool calls prior to execution, shifting the paradigm from post-hoc recovery to proactive evaluation and error mitigation. In practice, this architecture establishes a clear separation of concerns between the primary execution agent and a secondary review agent. As with any multi-agent system, the reviewer can introduce new errors while correcting others, yet no prior work to our knowledge has systematically measured this tradeoff. To quantify this tradeoff, we introduce Helpfulness-Harmfulness metrics: helpfulness measures the percentage of base agent errors that feedback corrects; harmfulness measures the percentage of correct responses that feedback degrades. These metrics directly inform reviewer design by revealing whether a given model or prompt provides net positive value. We evaluate our approach on BFCL (single-turn) and Tau2-Bench (multi-turn stateful scenarios), achieving +5.5% on irrelevance detection and +7.1% on multi-turn tasks. Our metrics reveal that reviewer model choice is critical: the reasoning model o3-mini achieves a 3:1 benefit-to-risk ratio versus 2.1:1 for GPT-4o. Automated prompt optimization via GEPA provides an additional +1.5-2.8%. Together, these results demonstrate a core advantage of separating execution and review: the reviewer can be systematically improved through model selection and prompt optimization, without retraining the base agent.