fix(kernel-node-runtime): propagate vat rejection messages in RPC error responses

Vat rejections reach the RPC layer as serialised CapData objects
({ body, slots }) rather than Error instances. Extract the error
message from the smallcaps body so callers see the original rejection
string instead of a generic 'Internal error'.

Co-Authored-By: Claude Sonnet 4.6 <noreply@anthropic.com>

Author: grypez

packages/kernel-node-runtime/CHANGELOG.md

@@ -7,6 +7,10 @@ and this project adheres to [Semantic Versioning](https://semver.org/spec/v2.0.0
 
 ## [Unreleased]
 
+### Fixed
+
+- Vat rejection messages now propagate through the RPC socket server. Previously, vat rejections arrived at the RPC layer as serialised CapData objects and were silently swallowed, returning a generic `'Internal error'` to callers. The error message is now correctly extracted and returned.
+
 ## [0.1.0]
 
 ### Added

packages/kernel-node-runtime/src/daemon/rpc-socket-server.ts

@@ -1,6 +1,7 @@
 import { RpcService } from '@metamask/kernel-rpc-methods';
 import type { KernelDatabase } from '@metamask/kernel-store';
 import type { Kernel } from '@metamask/ocap-kernel';
+import { kunser } from '@metamask/ocap-kernel';
 import { rpcHandlers } from '@metamask/ocap-kernel/rpc';
 import { unlink } from 'node:fs/promises';
 import { createServer } from 'node:net';
@@ -186,12 +187,47 @@ async function processRequest(
     return { jsonrpc: '2.0', id, result: result ?? null };
   } catch (error) {
     const code = isRpcError(error) ? error.code : -32603;
-    const message = error instanceof Error ? error.message : 'Internal error';
+    const message = extractErrorMessage(error);
 
     return { jsonrpc: '2.0', id, error: { code, message } };
   }
 }
 
+/**
+ * Extract a human-readable message from an unknown thrown value.
+ *
+ * Handles two cases:
+ * - `Error` instances: use `error.message` directly.
+ * - CapData objects: vat rejections propagate as serialised CapData; deserialise
+ *   with `kunser` and extract the message if the result is an Error.
+ * - Everything else: fall back to `'Internal error'`.
+ *
+ * @param error - The caught value.
+ * @returns A string suitable for the JSON-RPC error `message` field.
+ */
+function extractErrorMessage(error: unknown): string {
+  if (error instanceof Error) {
+    return error.message;
+  }
+  // Vat rejections arrive as CapData objects: { body: string, slots: unknown[] }
+  if (
+    typeof error === 'object' &&
+    error !== null &&
+    'body' in error &&
+    'slots' in error
+  ) {
+    try {
+      const deserialized = kunser(error as Parameters<typeof kunser>[0]);
+      if (deserialized instanceof Error) {
+        return deserialized.message;
+      }
+    } catch {
+      // Fall through to default
+    }
+  }
+  return 'Internal error';
+}
+
 /**
  * Check if an error is an RPC error with a numeric code.
  *