I ran into this a few days ago too. One of our internal processors threw an exception because it encountered an “Error” type when it expected a real implementation. The problem was that the import statement was missing.
unfortunately, since ksp runs before the kotlin compile task the import issue wasn’t shown at all in error logs and it was quite hard to figure out the root cause.
I updated our processor to check for the Error type case and not throw, but it is a bit difficult to always do that, and it seems like there should be a better way to ensure compilation errors with the compiler are always reported