Hey trussel,
I got it to work by doing the following-
1- Open a new blank sequence file
2- Open the SequentialModel.seq file by double clicking on the link at the bottom of the sequence editor
3- Click on Edit at the top of the sequence editor and go to <b>Sequence File Callbacks...</b>
4- Click on the ProcessModelPostStepFailure step and click Add
5- Click on the Edit button on the dialog box
6- Add an ActiveX action step
7- Right click on the new step and go to <b>Specify Module</b>
8- Set the settings as the following-
Object Reference = Runstate.Execution
Automation Server = NI TestStand API
Object Class = Execution
Action = Call Method
Method = Terminate
9- Click OK
10- Go to the new sequence file in Step 1 and add a pass/fail test
11- Right click on the pass/fail test and select <b>Edit Limits</b>
12- Change the lower limit to 5 and select OK. (this will make the test fail since it is comparing with 0)
13- Run the sequence by going to execute>>Single Pass (don't save the files)
You should see that the execution terminated correctly.
I hope this helps and is what you are looking for. Let me know if there's any other info. regarding this issue.