Apple - How do I make find fail if -exec fails?

This is a limitation of find. The POSIX standard specifies that the return status of find is 0 unless an error occurred while traversing the directories; the return status of executed commands doesn't enter into it.

You can make commands write their status to a file or to a descriptor:

find_status_file=$(mktemp findstatus)
: >"$find_status_file"
find … -exec sh -c 'trap "echo \$?" EXIT; invalid_command "$0"' {} \;
if [ -s "$find_status_file" ]; then
  echo 1>&2 "An error occurred"
fi
rm -f "$find_status_file"

Another method, as you discovered, is to use xargs. The xargs commands always processes all files, but returns the status 1 if any of the commands returns a nonzero status.

find … -print0 | xargs -0 -n1 invalid_command

Yet another method is to eschew find and use recursive globbing in the shell instead: **/ means any depth of subdirectories. This requires version 4 or above of bash; macOS is stuck at version 3.x so you'd have to install it from a port collection. Use set -e to halt the script on the first command returning a nonzero status.

shopt -s globstar
set -e
for x in **/*.xml; do invalid_command "$x"; done

Beware that in bash 4.0 through 4.2, this works but traverses symbolic links to directories, which is usually not desirable.

If you use zsh instead of bash, recursive globbing works out of the box with no gotchas. Zsh is available by default on OSX/macOS. In zsh, you can just write

set -e
for x in **/*.xml; do invalid_command "$x"; done

I can use this instead:

find . -name *.xml -print0 | xargs -n 1 -0 invalid_command

xargs is one option. However, it's actually trivially easy to do this with find as well by using + instead of \;

-exec  utility_name  [argument ...]   {} +

From the POSIX documentation:

If the primary expression is punctuated by a plus sign, the primary shall always evaluate as true, and the pathnames for which the primary is evaluated shall be aggregated into sets. The utility utility_name shall be invoked once for each set of aggregated pathnames. Each invocation shall begin after the last pathname in the set is aggregated, and shall be completed before the find utility exits and before the first pathname in the next set (if any) is aggregated for this primary, but it is otherwise unspecified whether the invocation occurs before, during, or after the evaluations of other primaries. If any invocation returns a non-zero value as exit status, the find utility shall return a non-zero exit status. An argument containing only the two characters “{}” shall be replaced by the set of aggregated pathnames, with each pathname passed as a separate argument to the invoked utility in the same order that it was aggregated. The size of any set of two or more pathnames shall be limited such that execution of the utility does not cause the system’s {ARG_MAX} limit to be exceeded. If more than one argument containing only the two characters “{}” is present, the behavior is unspecified.