Question : Formula in Data Validation not giving error when "false"

I have a formula that generates "false" for various combinations of cell values; however, there is no error message/data entry lock. The formula is referred to as =c3 in Data Validation.

=IF($H$3="HR",IF(AND($E$9=0,ISERROR(VLOOKUP($E$3,Table1[ExtH],1,FALSE))=FALSE),TRUE,FALSE),IF($H$3="ABS",IF(INDEX($M$16:$M$85,$E$9,1)=$E$3,TRUE,FALSE),IF($H$3="OUT",IF(OR(INDEX($H$16:$H$85,$E$9,1)="HR",INDEX($H$16:$H$85,$E$9,1)="IN"),TRUE,FALSE),IF(OR($H$3="IN",$H$3="*"),TRUE,FALSE))))

What would cause Data Validation to not give an error message/data entry lock?

Answer : Formula in Data Validation not giving error when "false"

The problem was caused by a circular reference. Refer to my 2nd question to continue the solution.