----------------------------------------------------------------------------------------------------------------------------------- Here's specifically what is happening here:
1) Payload is successfully set to "Before"
2) Is null validation is used which will pass the message only if payload is null. In this case as payload is not null, it creates an Error Object. Flow execution stops
#[error.description] = "Validation error"
3) Because no error handler is defined, the Mule default error handler handles the error
4) "Validation error" is the error message returned to the requestor in the body of the HTTP request with HTTP Status Code: 500 Reference diagram:

1. Set Payload "Start"
2. 'Is Balnk String' Creates an Error object with #[error.description] ="String is not blank"
3. Default Error Handler catches and Propagates error
4. 'On Error Propogate' is 'RED IN RED OUT'. It Returns Status Code : 500 & #[error.description]
-------------------------------------------------------------------------------------------------------------------------- Correct answer is String is not blank. Because validation component will throw an error as payload is not blank.