diff --git a/cli/tests/integration/run_tests.rs b/cli/tests/integration/run_tests.rs
index 29e424aaed..7354dbf1d3 100644
--- a/cli/tests/integration/run_tests.rs
+++ b/cli/tests/integration/run_tests.rs
@@ -2792,3 +2792,9 @@ itest!(unhandled_rejection_sync_error {
   args: "run --check unhandled_rejection_sync_error.ts",
   output: "unhandled_rejection_sync_error.ts.out",
 });
+
+itest!(nested_error {
+  args: "run nested_error.ts",
+  output: "nested_error.ts.out",
+  exit_code: 1,
+});
diff --git a/cli/tests/testdata/nested_error.ts b/cli/tests/testdata/nested_error.ts
new file mode 100644
index 0000000000..69828e1ca8
--- /dev/null
+++ b/cli/tests/testdata/nested_error.ts
@@ -0,0 +1,3 @@
+throw {
+  foo: new Error(),
+};
diff --git a/cli/tests/testdata/nested_error.ts.out b/cli/tests/testdata/nested_error.ts.out
new file mode 100644
index 0000000000..042a179ff0
--- /dev/null
+++ b/cli/tests/testdata/nested_error.ts.out
@@ -0,0 +1,4 @@
+error: Uncaught {
+  foo: Error
+    at file:///[WILDCARD]testdata/nested_error.ts:2:8
+}
diff --git a/core/error.rs b/core/error.rs
index f193c13e24..664cb5c0be 100644
--- a/core/error.rs
+++ b/core/error.rs
@@ -192,20 +192,17 @@ impl JsError {
     let msg = v8::Exception::create_message(scope, exception);
 
     let mut exception_message = None;
-    // Nest this state borrow. A mutable borrow can occur when accessing `stack`
-    // in this outer scope, invoking `Error.prepareStackTrace()` which calls
-    // `op_apply_source_map`.
-    {
-      let state_rc = JsRuntime::state(scope);
-      let state = state_rc.borrow();
-      if let Some(format_exception_cb) = &state.js_format_exception_cb {
-        let format_exception_cb = format_exception_cb.open(scope);
-        let this = v8::undefined(scope).into();
-        let formatted = format_exception_cb.call(scope, this, &[exception]);
-        if let Some(formatted) = formatted {
-          if formatted.is_string() {
-            exception_message = Some(formatted.to_rust_string_lossy(scope));
-          }
+    let state_rc = JsRuntime::state(scope);
+
+    let js_format_exception_cb =
+      state_rc.borrow().js_format_exception_cb.clone();
+    if let Some(format_exception_cb) = js_format_exception_cb {
+      let format_exception_cb = format_exception_cb.open(scope);
+      let this = v8::undefined(scope).into();
+      let formatted = format_exception_cb.call(scope, this, &[exception]);
+      if let Some(formatted) = formatted {
+        if formatted.is_string() {
+          exception_message = Some(formatted.to_rust_string_lossy(scope));
         }
       }
     }
@@ -263,7 +260,6 @@ impl JsError {
       let mut source_line = None;
       let mut source_line_frame_index = None;
       {
-        let state_rc = JsRuntime::state(scope);
         let state = &mut *state_rc.borrow_mut();
 
         // When the stack frame array is empty, but the source location given by