Issue similar to #1312. PDF renders, but TOC fails to populate and error given; "ERROR: compilation failed- error"

I have:

• searched the issue tracker for similar issues
• installed the latest version of Quarto CLI
• formatted my issue following the Bug Reports guide

Bug description

HTMLs render as expected. Once I attempt to render a .pdf, it produces a pdf but also produces an error and the TOC is not populated. I'm working in WIndows 10, working with VScode and rendering via quarto cli.

I've downloaded latest quarto using

quarto --version

returns:

1.7.31

I've installed, uninstalled, reinstalled tinytex multiple times both as administrator and as common user. It installs successfully every time, but outcome is always the same when rendering pdf. I've also restarted my pc multiple times.

This code installs correctly:
quarto install tinytex

quarto render test.qmd --to pdf
returns:

pandoc 
  to: latex
  output-file: test.tex
  standalone: true
  pdf-engine: xelatex
  variables:
    graphics: true
    tables: true
  default-image-extension: pdf
  toc: true
  number-sections: true

metadata
  documentclass: scrartcl
  classoption:
    - DIV=11
    - numbers=noendperiod
  papersize: letter
  header-includes:
    - \KOMAoption{captions}{tableheading}
  block-headings: true
  title: TEST, TEST
  author: TEST, TEST
  date: June 9, 2025


Rendering PDF
running xelatex - 1
  This is XeTeX, Version 3.141592653-2.6-0.999997 (TeX Live 2025) (preloaded format=xelatex)
   restricted \write18 enabled.
  entering extended mode
  The system cannot find the path specified.

updating tlmgr

updating existing packages
ERROR: 
compilation failed- error

Note the following text similar to issue #1312

updating tlmgr

updating existing packages

---

tlmgr --version
returns:

tlmgr revision 75204 (2025-05-13 23:48:24 +0200)
tlmgr using installation: C:/Users/username/AppData/Roaming/TinyTeX
TeX Live (https://tug.org/texlive) version 2025

in test.log (after rendering), the only warning/error messags I see are:

Package hyperref Warning: Rerun to get /PageLabels entry.





LaTeX Warning: Label(s) may have changed. Rerun to get cross-references right.



 ) 

Here is how much of TeX's memory you used:

 23291 strings out of 470487

 451940 string characters out of 5489509

 1137200 words of memory out of 5000000

 51275 multiletter control sequences out of 15000+600000

 630405 words of font info for 71 fonts, out of 8000000 for 9000

 36 hyphenation exceptions out of 8191

 108i,7n,114p,10918b,343s stack positions out of 10000i,1000n,20000p,200000b,200000s



Error 1 (driver return code) generating output;

file test.pdf may not be valid.

Steps to reproduce

cli:
quarto render test.qmd --to pdf

---
title: "TEST, TEST"
author: "TEST, TEST"
date: "June 9, 2025"
format:
  pdf:
    toc: true
    number-sections: true
    keep-tex: true
---

### This is a test

# big test

## this is a 2 test

Actual behavior

Clean render of pdf with TOC.

Expected behavior

TOC does not populate and errors produced.

Your environment

VSCode
Windows 10

Quarto check output

"
quarto check
Quarto 1.7.31
[>] Checking environment information...
Quarto cache location: C:\Users\username\AppData\Local\quarto
[>] Checking versions of quarto binary dependencies...
Pandoc version 3.6.3: OK
Dart Sass version 1.85.1: OK
Deno version 1.46.3: OK
Typst version 0.13.0: OK
[>] Checking versions of quarto dependencies......OK
[>] Checking Quarto installation......OK
Version: 1.7.31
Path: C:\Program Files\Quarto\bin
CodePage: 1252

[>] Checking tools....................OK
TinyTeX: v2025.06
Chromium: (not installed)

[>] Checking LaTeX....................OK
Using: TinyTex
Path: C:\Users\username\AppData\Roaming\TinyTeX\bin\windows
Version: undefined

[>] Checking Chrome Headless....................OK
Chrome: (not detected)

[>] Checking basic markdown render....OK

[>] Checking Python 3 installation....OK
Version: 3.11.8
Path: C:/Python/venvs/quartovenv/Scripts/python.exe
Jupyter: 5.7.1
Kernels: python3

[>] Checking Jupyter engine render....OK

[>] Checking R installation...........(None)

  Unable to locate an installed version of R.
  Install R from https://cloud.r-project.org/

"

Start by running quarto render test.qmd --to pdf on Windows with the provided minimal test.qmd, then inspect the generated test.log and the xelatex output around “The system cannot find the path specified.” Check how TinyTeX is discovered and invoked during PDF rendering. Done means the command completes without a compilation error and produces a PDF whose table of contents is populated.