You have wired a constant to the termination terminal of Loop 1 that tells it to stop after one iteration. The loop with the error vi in it will also stop after one iteration. However, if the case is such that you enter the error vi then the error vi must execute completely before the loop is ended. I would suggest that you put a stop button on the front panel and use this to terminate the conditional terminal, although it's not entirely clear to me what you're trying to do.
Also, on a side note, I noticed that you put code in the block diagram to increment a counter on each iteration. I assume that this was for troubleshooting since the data is not used anywhere in the code. This could have been accomplished by simply reading the iteration number from the
iteration terminal (the blue i in the lower left corner of the loop). In the event that you actually needed to create your own counter you would be better to use a shift register to pass data from one loop to another than to use the value property nodes.
