OIC 3 - Default Handler not looping

Summary: Default handler in a file reading loop doesn't go to next record on an error

Content (please ensure you mask any confidential information):

I added a default handler to a loop that is reading through a file, but if it errors, it doesn't go to the next record. I have no idea what I'm doing wrong. I've tried putting the default handler in different scopes surrounding the process, but I always get the same results. Can someone see what I'm doing wrong? I am including documents of the code and execution output at the point of error through the end.