Closes #75. Properly set the conditions when call to applyOutputs fails.

[karanthukral]

Closes #75

Managing the PR process for @dansawyer73

💸 TL;DR

• Ensure the status condition is updated to be false when ApplyOutputs fails. This ensures that the resource is not marked ready when status conditions fail

🧪 Testing Steps / Validation

• Couldn't figure out a sane way to test this in envtests without needing to use a fake client. Ended up using manual verification in a couple of internal controllers.
• Updated the sdk version in a controller locally and ran all tests to ensure the behaviour remains consistent for current users
• Updated controller to try to create a deployment in a namespace that doesn't exist and the status of the object is shown below:

- lastTransitionTime: "2025-12-04T19:56:45Z"
      message: 'Failed to apply outputs: ensuring outputs: ensuring /, Kind= broken-deployment:
        cannot create object: namespaces "namespace-does-not-exist" not found'
      observedGeneration: 7
      reason: ApplyOutputsFailed
      status: "False"
      type: ContainerPrefixFetched
    - lastTransitionTime: "2025-12-04T19:56:45Z"
      message: 'Non-successful conditions: ContainerPrefixFetched'
      observedGeneration: 7
      reason: ConditionsFailed
      status: "False"
      type: Ready

If anyone has ideas on how best to test this in env/unit tests let me know

✅ Checks

• CI tests (if present) are passing
• Adheres to code style for repo
• Contributor License Agreement (CLA) completed if not a Reddit employee

[karanthukral]

Created a draft PR that I will get tested tomorrow hopefully and opened for actual review

[kdorosh]

one question for my own understanding

[kdorosh]

should we do this even if the condition isn't empty?

[karanthukral]

good question, let me think about it. The only weird part of that would be what is the condition type since we are overriding other fields here? Should it just be empty? 🤔

The IsEmpty returns true only if all fields are empty - https://github.com/reddit/achilles-sdk-api/blob/main/api/condition.go#L115

[karanthukral]

We also seem to do this same check when setting any other fields for the condition too -

achilles-sdk/pkg/fsm/internal/reconciler.go

Line 276 in 04c816e

if !condition.IsEmpty() {