Further research showas that this error will be generated when an error trap is immediately after a loop statement.

Break on
Open(1,"c:\i.txt",2)
$a = ReadLine(1)
While $a <> ""
? "line = "$a
$a = ReadLine(1)
Loop
? @SERROR ?
Close(1)
Shell "%COMSPEC% /C pause"
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Taxation WITH representation isn't so hot, either!