fix: surface the token-exchange error instead of KeyError('access_token')

CHANGELOG.md

@@ -1,5 +1,8 @@
 # Release History
 
+# Unreleased
+- Fix: a rejected token-federation exchange now reports the reason the endpoint gave. `_exchange_token` raised `KeyError: 'access_token'` on an OAuth error body, so the connection logged `Token exchange failed, using external token: 'access_token'` and the endpoint's `error` / `error_description` were discarded. It now raises a `ValueError` naming the endpoint, the HTTP status, and the returned error, and a non-JSON body reports the endpoint and status instead of surfacing a `JSONDecodeError`. The graceful fallback to the external token is unchanged ([#904](https://github.com/databricks/databricks-sql-python/issues/904))
+
 # 4.5.0 (2026-09-01)
 - Upgrade Databricks SQL Kernel to 1.0.0.
 - Add JWT private-key M2M and Azure Entra authentication for kernel connections.

src/databricks/sql/auth/token_federation.py

@@ -188,7 +188,26 @@ def _exchange_token(self, access_token: str) -> Token:
             HttpMethod.POST, url=token_url, body=body, headers=headers
         )
 
-        token_response = json.loads(response.data.decode())
+        status = getattr(response, "status", None)
+
+        try:
+            token_response = json.loads(response.data.decode())
+        except (ValueError, UnicodeDecodeError) as e:
+            raise ValueError(
+                f"Token exchange at {token_url} returned a non-JSON response "
+                f"(HTTP {status})"
+            ) from e
+
+        if "access_token" not in token_response:
+            # An OAuth error body carries the reason the exchange was refused.
+            # Surface it instead of letting a KeyError hide it. The response
+            # holds no token in this case, so nothing sensitive is exposed.
+            error = token_response.get("error", "unknown_error")
+            description = token_response.get("error_description", "")
+            raise ValueError(
+                f"Token exchange at {token_url} was rejected (HTTP {status}): "
+                f"{error} {description}".strip()
+            )
 
         return Token(
             token_response["access_token"], token_response.get("token_type", "Bearer")

tests/unit/test_token_federation.py

@@ -194,15 +194,75 @@ def test_exchange_token_success(self, token_federation_provider, mock_http_clien
         assert parsed_body["client_id"][0] == "test-client-id"
 
     def test_exchange_token_failure(self, token_federation_provider, mock_http_client):
-        """Test token exchange failure handling."""
+        """An OAuth error body is surfaced instead of a bare KeyError."""
         mock_response = Mock()
-        mock_response.data = b'{"error": "invalid_request"}'
+        mock_response.data = (
+            b'{"error": "invalid_request", '
+            b'"error_description": "subject token is not supported"}'
+        )
         mock_response.status = 400
         mock_http_client.request.return_value = mock_response
 
-        with pytest.raises(KeyError):  # Will raise KeyError due to missing access_token
+        with pytest.raises(ValueError) as exc_info:
+            token_federation_provider._exchange_token("external-token-123")
+
+        message = str(exc_info.value)
+        assert "invalid_request" in message
+        assert "subject token is not supported" in message
+        assert "400" in message
+        assert "https://test.databricks.com/oidc/v1/token" in message
+
+    def test_exchange_token_failure_without_error_description(
+        self, token_federation_provider, mock_http_client
+    ):
+        """A body carrying no error fields still names the failing endpoint."""
+        mock_response = Mock()
+        mock_response.data = b"{}"
+        mock_response.status = 401
+        mock_http_client.request.return_value = mock_response
+
+        with pytest.raises(ValueError) as exc_info:
+            token_federation_provider._exchange_token("external-token-123")
+
+        assert "unknown_error" in str(exc_info.value)
+
+    def test_exchange_token_non_json_response(
+        self, token_federation_provider, mock_http_client
+    ):
+        """A non-JSON body reports the endpoint rather than a JSONDecodeError."""
+        mock_response = Mock()
+        mock_response.data = b"<html>502 Bad Gateway</html>"
+        mock_response.status = 502
+        mock_http_client.request.return_value = mock_response
+
+        with pytest.raises(ValueError) as exc_info:
             token_federation_provider._exchange_token("external-token-123")
 
+        message = str(exc_info.value)
+        assert "non-JSON" in message
+        assert "502" in message
+
+    def test_exchange_token_failure_keeps_external_token_fallback(
+        self, token_federation_provider, mock_http_client, mock_external_provider
+    ):
+        """A rejected exchange still falls back to the external token."""
+        external_token = create_jwt_token(
+            issuer="https://login.microsoftonline.com/tenant-id/"
+        )
+        mock_external_provider.add_headers.side_effect = (
+            lambda headers: headers.update({"Authorization": f"Bearer {external_token}"})
+        )
+
+        mock_response = Mock()
+        mock_response.data = b'{"error": "invalid_request"}'
+        mock_response.status = 400
+        mock_http_client.request.return_value = mock_response
+
+        request_headers: dict = {}
+        token_federation_provider.add_headers(request_headers)
+
+        assert request_headers["Authorization"] == f"Bearer {external_token}"
+
     @pytest.mark.parametrize(
         "external_issuer,should_exchange",
         [