If a watch in XdsClient fails, XdsNameResolver will propagate the error directly to the channel without adding context and without setting a proper status.

A user saw

 [Channel<2441>: (xds:///<snip>)] Failed to resolve name. status=Status{code=NOT_FOUND, description=Requested entity was not found., cause=null} 

And accompanying RPC failures:

Caused by: java.lang.RuntimeException: io.grpc.StatusRuntimeException with message: NOT_FOUND: Requested entity was not found. 

That RPC failure is very bad, because it isn't clear it is from XdsNR and should be UNAVAILABLE.

As seen in b/221844501.