demo.sh

#!/bin/bash

fake_command() {
  echo some junk
  return 1
}

demo() {
  FOO="$(fake_command)"

  if [ -z "$FOO" ]; then
    echo output is empty
    return 1
  fi

  echo output is $FOO
}

echo "Testing without -e"
demo

echo "Testing with -e"
set -e
demo