A set of tests to show if your version of PowerShell returns the correct exit code under various error conditions.

PowerShellExitTest.ps1

exit 1

PowerShellParamTest.ps1

param(
 [Parameter(Position=0,Mandatory=1)]
 [string]$UnpassedMandatoryParameter
)

PowerShellStopTest.ps1

$ErrorActionPreference = 'stop'

Get-ChildItem C:\UnknownFolder\UnknownFile

PowerShellThrowTest.ps1

throw 'error!'

TestPowerShellExitCode.cmd

@echo off
setlocal
set Version=%~1

echo.
echo All tests should return a non-zero exit code
echo To target a specific version use: TestPowerShellExitCode "-Version X" 
echo (-Version 1 and -Version 2 are known to be broken)
echo.

PowerShell %Version% -File PowerShellExitTest.ps1 1>nul 2>&1
echo TEST "-File & Exit": %errorlevel%

PowerShell %Version% -File PowerShellThrowTest.ps1 1>nul 2>&1
echo TEST "-File & Throw": %errorlevel%

PowerShell %Version% -File PowerShellStopTest.ps1 1>nul 2>&1
echo TEST "-File & Stop": %errorlevel%

PowerShell %Version% -NonInteractive -File PowerShellParamTest.ps1 1>nul 2>&1
echo TEST "-File & Param": %errorlevel%

PowerShell %Version% -Command "exit 1" 1>nul 2>&1
echo TEST "-Command & Exit": %errorlevel%

PowerShell %Version% -Command "throw 'error!'" 1>nul 2>&1
echo TEST "-Command & Throw": %errorlevel%

PowerShell %Version% -Command "$ErrorActionPreference='stop';Get-ChildItem C:\UnknownFolder\UnknownFile" 1>nul 2>&1
echo TEST "-Command & Stop": %errorlevel%

I've reproduced the problem with PowerShell 4, but it works fine with PowerShell 5 on Windows Server 2012 R2

Recently I've found out that -version option has some serious limitations. Some background information
is here.
Basically, it can run only two versions of Powershell: the latest installed version and version 2. Instead of
all others one always gets the latest.

The behavior is the same on all current Windows versions. The difference is only in which versions of Windows
Management Framework can be installed.

Here are test results on Windows Server 2012.

1. By default it runs version 3:

>powershell $PSVersionTable.PSVersion

Major  Minor  Build  Revision
-----  -----  -----  --------
3      0      -1     -1

And we can run version 2 (provided .NET Framework v2.0.50727 is installed):

>powershell -version 2 $PSVersionTable.PSVersion

Major  Minor  Build  Revision
-----  -----  -----  --------
2      0      -1     -1

-version 3 option, as expected, gives us version 3:

>powershell -version 3 $PSVersionTable.PSVersion

Major  Minor  Build  Revision
-----  -----  -----  --------
3      0      -1     -1

---

2. Let's install Windows Management Framework 4.0.

By default we get version 4:

>powershell $PSVersionTable.PSVersion

Major  Minor  Build  Revision
-----  -----  -----  --------
4      0      -1     -1

-version 2 option also works as expected:

>powershell -version 2 $PSVersionTable.PSVersion

Major  Minor  Build  Revision
-----  -----  -----  --------
2      0      -1     -1

With -version 3 option comes a surprise - we get version 4 instead:

>powershell -version 3 $PSVersionTable.PSVersion

Major  Minor  Build  Revision
-----  -----  -----  --------
4      0      -1     -1

Now with -version 4 option:

>powershell -version 4 $PSVersionTable.PSVersion

Major  Minor  Build  Revision
-----  -----  -----  --------
4      0      -1     -1

---

3. And finally with Windows Management Framework 5.0 installed.

Version 5 by default:

>powershell $PSVersionTable.PSVersion

Major  Minor  Build  Revision
-----  -----  -----  --------
5      0      10586  117

-version 2 and -version 5 give us versions 2 and 5 respectively:

>powershell -version 2 $PSVersionTable.PSVersion
Major  Minor  Build  Revision
-----  -----  -----  --------
2      0      -1     -1

>powershell -version 5 $PSVersionTable.PSVersion

Major  Minor  Build  Revision
-----  -----  -----  --------
5      0      10586  117

Whereas both -version 3 and version 4 give us version 5:

>powershell -version 3 $PSVersionTable.PSVersion

Major  Minor  Build  Revision
-----  -----  -----  --------
5      0      10586  117

>powershell -version 4 $PSVersionTable.PSVersion

Major  Minor  Build  Revision
-----  -----  -----  --------
5      0      10586  117