Event Handlers and Variable Persistence
We are using temporary variables as we do need Table types not just basic variable types.
I now discovered the issue when I was trying out the persistent variables that you suggested.
I seem to have missed that the function I accidentally broke and was causing the exception was also being called in my OnStartTest event handler so I never actually set the other variables as it already error-ed out there causing this behavior that I saw.
To answer the question though, it seems variables are still set to the values defined during execution and do not revert back to their default states during exception. It was my mistake that made me think something else was going on:
Default state for the temporary is ""
Old state of the Persistent variable is 154733
Thank you to everyone who took the time to think about this issue though. I greatly appreciate it.