The way express VIs work is that they generate an actual VI which will be run every time you change the configuration and that VI is saved as part of the calling VI. You can look at the generated VI by right clicking the VI and selecting Open Front Panel, which will ask you if you want to convert. If you do that and look inside the actual VI that it calls, you will see that it makes an unconditional call to a VI which modifies the error chain. I would argue that this call should probably not be made if there the error in was true, so I would call this a bug.
In practice, I would say the best option is either to call the file dialog primitive yourself or to call Merge Errors and put the original error wire on top or wrap the entire express VI in an error case structure.
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