## Code Analysis

### Function creation dispatches labeled EXIT statements
`server/plpgsql/json_convert.go:129-174`
```go
func jsonConvertStatement(stmt statement, datums datumNames) (Statement, error) {
	switch {
	case stmt.Exit != nil:
		return stmt.Exit.Convert(), nil
	// ... other recognized statement arms ...
	default:
		return Block{}, errors.Errorf("unhandled statement type: %T", stmt)
	}
}
```
The function-creation conversion path accepts a decoded statement only when one of the recognized arms is populated. Otherwise it returns the observed `unhandled statement type` error before the function can be invoked.

### Labeled EXIT is represented as a labeled jump
`server/plpgsql/json.go:174-180, 515-547`
```go
type plpgSQL_stmt_exit struct {
	Label      string `json:"label"`
	IsExit     bool   `json:"is_exit"`
	Condition  *expr  `json:"cond"`
	LineNumber int32  `json:"lineno"`
}

if len(stmt.Label) > 0 {
	gotoStmt = Goto{Offset: offset, Label: stmt.Label}
}
```
The source defines a decoded labeled EXIT and a conversion to a labeled `Goto`, establishing the intended control-flow representation. The recorded failure occurs earlier, in statement conversion, so the loop body and `FOUND` update are not reached.

### Existing regression requirement
`testing/go/plpgsql_found_test.go:340-361`
```go
Query: `CREATE FUNCTION f_labelled_exit() RETURNS int LANGUAGE plpgsql AS $$
...
	<<outer>>
	FOR r IN SELECT id FROM k ORDER BY id LOOP
		FOR s IN SELECT id FROM k ORDER BY id LOOP
			n := n + 1;
			EXIT outer;
...
	IF NOT FOUND THEN RETURN -1; END IF;
	RETURN n;
END; $$;`,
Expected: []sql.Row{},
...
Query:    `SELECT f_labelled_exit();`,
Expected: []sql.Row{{1}},
```
The repository regression test requires the function to be created and then return `1` after the labeled outer exit, with `FOUND` remaining true.

### Observed execution
```text
# BF-ORDER-2 labeled outer exit
# Command: docker exec -i aefd1e22c181 env PGPASSWORD=[REDACTED] psql -v ON_ERROR_STOP=1 -h 127.0.0.1 -U postgres -d postgres
# Fixture: tags rows (1, {a,b}) and (2, {c})
# Function definition was rejected before invocation.
ERROR:  unhandled statement type: plpgsql.statement
# Expected: outer_count=1, inner_count=1, found_after=true, trace={"1:1"}
# Result: counters and FOUND were not observable.
```
The captured `CREATE FUNCTION` attempt failed with the same fallback error described by the conversion source path. Because creation failed, no invocation or runtime counter/`FOUND` readback was produced.

### Result
The runtime payload and source excerpts support the reported failure: the labeled-loop function is rejected during creation with `unhandled statement type: plpgsql.statement`, before the expected outer-loop exit and `FOUND` result can execute.

### Test context
No stubs, mocks, or bypasses were recorded for this test.