Hello @TheRealGramdalf and thanks for opening this issue.

having at least one file which fails to parse causes all dynamic file configuration to be ignored

As stated in #8921 (comment) this is by design.
This is done to prevent Traefik from using an incomplete configuration, potentially disrupting a working setup.

Deep down, the issue lies in the validation of the configuration prior to its application. As you've noted, #10889 is the key. We've answered to that particular issue and any help on that is very welcome.

This is done to prevent Traefik from using an incomplete configuration, potentially disrupting a working setup.

The way this currently works, it actually does disrupt a working setup. If I add a new service, and make a simple syntax mistake, it brings down every other service traefik currently serves. I don't believe this is the intention behind the dynamic provider.

In fact, take the following example:

services:
  traefik:
    image: "traefik:v3.0.3"
    ports:
      - 80:80
      - 8080:8080
    command:
      # Log level: INFO|DEBUG|ERROR
      - --log.level=DEBUG
      - --api.dashboard=true
      - --api.insecure=true
      - --providers.docker.watch=true
    labels:
      traefik.http.routers.api.rule: "Host(`*`)"
      traefik.http.routers.api.service: api@internal
      traefik.http.routers.api.middlewares: "local-only"
    volumes:
      - "/var/run/docker.sock:/var/run/docker.sock:ro"
  #whoami:
  #  image: traefik/whoami
  #  labels:
  #    traefik.http.middlewares.local-only.ipallowlist.sourcerange: "192.168.1.0/24"
  whoami:
    image: traefik/whoami
    labels:
      traefik.http.services.whoami.loadbalancer.server.port: 80
      traefik.http.routers.whoami.service: whoami
      traefik.http.routers.whoami.rule: "Host(`localhost`)"

This is a minimal example with no syntax errors, but a misconfigured middleware. The dashboard is considered failed (which can be seen by accessing the dashboard directly on :8080), but the whoami service continues to function.
All well and good; this is the case with the dynamic directory provider.

Now, introduce a syntax error in traefik labels:

services:
  traefik:
    image: "traefik:v3.0.3"
    ports:
      - 80:80
      - 8080:8080
    command:
      # Log level: INFO|DEBUG|ERROR
      - --log.level=DEBUG
      - --api.dashboard=true
      - --api.insecure=true
      - --providers.docker.watch=true
    labels:
      traefik.http.routers.api.rule: "Host(`*`)"
      traefik.http.routers.api.service: api@internal
      traefik.http.routers.api.middlewar: "local-only" # <<< Syntax error here (middlewar, not middleware)
    volumes:
      - "/var/run/docker.sock:/var/run/docker.sock:ro"
  #whoami:
  #  image: traefik/whoami
  #  labels:
  #    traefik.http.middlewares.local-only.ipallowlist.sourcerange: "192.168.1.0/24"
  whoami:
    image: traefik/whoami
    labels:
      traefik.http.services.whoami.loadbalancer.server.port: 80
      traefik.http.routers.whoami.service: whoami
      traefik.http.routers.whoami.rule: "Host(`localhost`)"

According to the aforementioned design choices, the whoami service/router should now be unavailable. Instead, navigating to the dashboard reveals whoami to be functioning flawlessly, with the api service nowhere to be found.

This implies two main things:

• Behaviour is not consistent across dynamic providers regarding syntax errors
• Syntax errors are only reported in logs, and do not show up in the dashboard

I don't think saying "It's not a bug, it's a feature" is really correct here- as demonstrated within traefik itself, this behaviour is perfectly acceptable, and the logic clearly exists to some extent.