diff --git a/test/e2e/policies.test-suite/topology-aware/n4c16/test12-config-status/code.var.sh b/test/e2e/policies.test-suite/topology-aware/n4c16/test12-config-status/code.var.sh
index 644001707..c8472e046 100644
--- a/test/e2e/policies.test-suite/topology-aware/n4c16/test12-config-status/code.var.sh
+++ b/test/e2e/policies.test-suite/topology-aware/n4c16/test12-config-status/code.var.sh
@@ -1,4 +1,13 @@
-helm-terminate
+CONFIG_GROUP="group.test"
+
+cleanup() {
+    vm-command "kubectl delete -n kube-system topologyawarepolicies.config.nri/default" || :
+    vm-command "kubectl delete -n kube-system topologyawarepolicies.config.nri/$CONFIG_GROUP" || :
+    vm-command "kubectl label nodes --all config.nri/group-" || :
+    helm-terminate || :
+}
+
+cleanup
 helm_config=$(instantiate helm-config.yaml) helm-launch topology-aware
 
 sleep 1
@@ -12,6 +21,7 @@ vm-command "kubectl wait -n kube-system topologyawarepolicies/default \
     error "expected initial Success status"
 }
 
+# verify propagation of errors back to source CR
 vm-put-file $(RESERVED_CPU=750x instantiate custom-config.yaml) broken-config.yaml
 vm-command "kubectl apply -f broken-config.yaml"
 
@@ -26,3 +36,19 @@ vm-command "kubectl wait -n kube-system topologyawarepolicies/default \
 }
 
 helm-terminate
+
+# verify propagation of initial configuration errors back to source CR
+vm-put-file $(CONFIG_NAME="$CONFIG_GROUP" RESERVED_CPU=750x instantiate custom-config.yaml) \
+            broken-group-config.yaml
+vm-command "kubectl apply -f broken-group-config.yaml" || \
+    error "failed to install broken group config"
+vm-command "kubectl label nodes --all config.nri/group=test" || \
+    error "failed to label nodes for group config"
+
+expect_error=1 launch_timeout=5s helm_config=$(instantiate helm-config.yaml) helm-launch topology-aware
+get-config-node-status-error topologyawarepolicies/$CONFIG_GROUP | \
+    grep "failed to parse" | grep -q 750x || {
+    error "expected initial error not found in status"
+}
+
+cleanup
diff --git a/test/e2e/policies.test-suite/topology-aware/n4c16/test12-config-status/custom-config.yaml.in b/test/e2e/policies.test-suite/topology-aware/n4c16/test12-config-status/custom-config.yaml.in
index 720ef00d4..4a5f812de 100644
--- a/test/e2e/policies.test-suite/topology-aware/n4c16/test12-config-status/custom-config.yaml.in
+++ b/test/e2e/policies.test-suite/topology-aware/n4c16/test12-config-status/custom-config.yaml.in
@@ -1,7 +1,7 @@
 apiVersion: config.nri/v1alpha1
 kind: TopologyAwarePolicy
 metadata:
-  name: default
+  name: ${CONFIG_NAME:-default}
   namespace: kube-system
 spec:
   pinCPU: true