Add regression tests to tests and tooling

[imDarshanGK]

Strengthen the automated coverage for the core test and tooling surfaces.

Scope:

• Add at least one regression test for a bug-prone backend path.
• Cover a frontend or API behavior that currently relies on manual verification.
• Expand assertions so failures are easier to diagnose.

Acceptance criteria:

• A new or updated test fails before the bug fix and passes after it.
• The touched area has a clear test name and a short note about the scenario it protects.

[YLaxmikanth]

Hi @imDarshanGK,

I'd like to work on #941.

My plan is to add focused regression tests for the tests and tooling module, covering existing workflows and previously fixed behaviors while keeping the implementation minimal, maintainable, and aligned with the current testing patterns.

If the issue is available, I'd appreciate being assigned.

Thanks!
/assign SSoc26