diff --git a/dev/tests/unit/Magento/FunctionalTestFramework/Util/ActionMergeUtilTest.php b/dev/tests/unit/Magento/FunctionalTestFramework/Util/ActionMergeUtilTest.php
new file mode 100644
index 000000000..913b106a7
--- /dev/null
+++ b/dev/tests/unit/Magento/FunctionalTestFramework/Util/ActionMergeUtilTest.php
@@ -0,0 +1,34 @@
+<?php
+/**
+ * Copyright © Magento, Inc. All rights reserved.
+ * See COPYING.txt for license details.
+ */
+
+namespace Tests\unit\Magento\FunctionalTestFramework\Test\Handlers;
+
+use Magento\FunctionalTestingFramework\Test\Objects\ActionObject;
+use Magento\FunctionalTestingFramework\Test\Util\ActionMergeUtil;
+use Magento\FunctionalTestingFramework\Util\MagentoTestCase;
+
+class ActionMergeUtilTest extends MagentoTestCase
+{
+    /**
+     * Test Exception Handler for merging actions
+     *
+     * @throws \Exception
+     */
+    public function testMergeActionsException()
+    {
+        $testActionMergeUtil = new ActionMergeUtil(null, null);
+
+        $actionObject = new ActionObject('fakeAction', 'comment', [
+            'userInput' => '{{someEntity.entity}}'
+        ]);
+
+        $this->expectExceptionMessage("Could not resolve entity reference \"{{someEntity.entity}}\" " .
+            "in Action with stepKey \"fakeAction\".\n" .
+            "Exception occurred parsing action at StepKey \"fakeAction\"");
+
+        $testActionMergeUtil->resolveActionSteps(["merge123" => $actionObject]);
+    }
+}
diff --git a/dev/tests/unit/Magento/FunctionalTestFramework/Util/TestGeneratorTest.php b/dev/tests/unit/Magento/FunctionalTestFramework/Util/TestGeneratorTest.php
new file mode 100644
index 000000000..097150888
--- /dev/null
+++ b/dev/tests/unit/Magento/FunctionalTestFramework/Util/TestGeneratorTest.php
@@ -0,0 +1,41 @@
+<?php
+/**
+ * Copyright © Magento, Inc. All rights reserved.
+ * See COPYING.txt for license details.
+ */
+
+namespace Tests\unit\Magento\FunctionalTestFramework\Test\Handlers;
+
+use AspectMock\Test as AspectMock;
+
+use Magento\FunctionalTestingFramework\Test\Objects\ActionObject;
+use Magento\FunctionalTestingFramework\Test\Objects\TestObject;
+use Magento\FunctionalTestingFramework\Util\MagentoTestCase;
+use Magento\FunctionalTestingFramework\Util\TestGenerator;
+
+class TestGeneratorTest extends MagentoTestCase
+{
+    /**
+     * Basic test to check exceptions for incorrect entities.
+     *
+     * @throws \Exception
+     */
+    public function testEntityException()
+    {
+        $actionObject = new ActionObject('fakeAction', 'comment', [
+            'userInput' => '{{someEntity.entity}}'
+        ]);
+
+        $testObject = new TestObject("sampleTest", ["merge123" => $actionObject], [], [], "filename");
+
+        $testGeneratorObject = TestGenerator::getInstance("", ["sampleTest" => $testObject]);
+
+        AspectMock::double(TestGenerator::class, ['loadAllTestObjects' => ["sampleTest" => $testObject]]);
+
+        $this->expectExceptionMessage("Could not resolve entity reference \"{{someEntity.entity}}\" " .
+            "in Action with stepKey \"fakeAction\".\n" .
+            "Exception occurred parsing action at StepKey \"fakeAction\" in Test \"sampleTest\"");
+
+        $testGeneratorObject->createAllTestFiles(null, []);
+    }
+}
diff --git a/src/Magento/FunctionalTestingFramework/Test/Objects/ActionObject.php b/src/Magento/FunctionalTestingFramework/Test/Objects/ActionObject.php
index 1efb0f603..c91ebaf5c 100644
--- a/src/Magento/FunctionalTestingFramework/Test/Objects/ActionObject.php
+++ b/src/Magento/FunctionalTestingFramework/Test/Objects/ActionObject.php
@@ -658,7 +658,7 @@ private function resolveEntityDataObjectReference($obj, $match)
     private function resolveParameterization($isParameterized, $replacement, $match, $object)
     {
         if ($isParameterized) {
-            $parameterList = $this->stripAndReturnParameters($match);
+            $parameterList = $this->stripAndReturnParameters($match) ?: [];
             $resolvedReplacement = $this->matchParameterReferences($replacement, $parameterList);
         } else {
             $resolvedReplacement = $replacement;
@@ -682,26 +682,7 @@ private function matchParameterReferences($reference, $parameters)
     {
         preg_match_all('/{{[\w.]+}}/', $reference, $varMatches);
         $varMatches[0] = array_unique($varMatches[0]);
-        if (count($varMatches[0]) > count($parameters)) {
-            if (is_array($parameters)) {
-                $parametersGiven = implode(",", $parameters);
-            } elseif ($parameters == null) {
-                $parametersGiven = "NONE";
-            } else {
-                $parametersGiven = $parameters;
-            }
-            throw new TestReferenceException(
-                "Parameter Resolution Failed: Not enough parameters given for reference " .
-                $reference . ". Parameters Given: " . $parametersGiven,
-                ["reference" => $reference, "parametersGiven" => $parametersGiven]
-            );
-        } elseif (count($varMatches[0]) < count($parameters)) {
-            throw new TestReferenceException(
-                "Parameter Resolution Failed: Too many parameters given for reference " .
-                $reference . ". Parameters Given: " . implode(", ", $parameters),
-                ["reference" => $reference, "parametersGiven" => $parameters]
-            );
-        }
+        $this->checkParameterCount($varMatches[0], $parameters, $reference);
 
         //Attempt to Resolve {{data}} references to actual output. Trim parameter for whitespace before processing it.
         //If regex matched it means that it's either a 'StringLiteral' or $key.data$/$$key.data$$ reference.
@@ -730,4 +711,43 @@ private function matchParameterReferences($reference, $parameters)
         }
         return $reference;
     }
+
+    /**
+     * Checks count of parameters versus matches
+     *
+     * @param array  $matches
+     * @param array  $parameters
+     * @param string $reference
+     * @return void
+     * @throws \Exception
+     */
+    private function checkParameterCount($matches, $parameters, $reference)
+    {
+        if (count($matches) > count($parameters)) {
+            if (is_array($parameters)) {
+                $parametersGiven = implode(",", $parameters);
+            } elseif ($parameters == null) {
+                $parametersGiven = "NONE";
+            } else {
+                $parametersGiven = $parameters;
+            }
+            throw new TestReferenceException(
+                "Parameter Resolution Failed: Not enough parameters given for reference " .
+                $reference . ". Parameters Given: " . $parametersGiven,
+                ["reference" => $reference, "parametersGiven" => $parametersGiven]
+            );
+        } elseif (count($matches) < count($parameters)) {
+            throw new TestReferenceException(
+                "Parameter Resolution Failed: Too many parameters given for reference " .
+                $reference . ". Parameters Given: " . implode(", ", $parameters),
+                ["reference" => $reference, "parametersGiven" => $parameters]
+            );
+        } elseif (count($matches) == 0) {
+            throw new TestReferenceException(
+                "Parameter Resolution Failed: No parameter matches found in parameterized element with selector " .
+                $reference,
+                ["reference" => $reference]
+            );
+        }
+    }
 }
diff --git a/src/Magento/FunctionalTestingFramework/Test/Util/ActionMergeUtil.php b/src/Magento/FunctionalTestingFramework/Test/Util/ActionMergeUtil.php
index 0a6bc7957..65fe7c857 100644
--- a/src/Magento/FunctionalTestingFramework/Test/Util/ActionMergeUtil.php
+++ b/src/Magento/FunctionalTestingFramework/Test/Util/ActionMergeUtil.php
@@ -266,11 +266,19 @@ private function insertReadinessSkips()
     private function sortActions($parsedSteps)
     {
         foreach ($parsedSteps as $parsedStep) {
-            $parsedStep->resolveReferences();
-            if ($parsedStep->getLinkedAction()) {
-                $this->stepsToMerge[$parsedStep->getStepKey()] = $parsedStep;
-            } else {
-                $this->orderedSteps[$parsedStep->getStepKey()] = $parsedStep;
+            try {
+                $parsedStep->resolveReferences();
+
+                if ($parsedStep->getLinkedAction()) {
+                    $this->stepsToMerge[$parsedStep->getStepKey()] = $parsedStep;
+                } else {
+                    $this->orderedSteps[$parsedStep->getStepKey()] = $parsedStep;
+                }
+            } catch (\Exception $e) {
+                throw new TestReferenceException(
+                    $e->getMessage() .
+                    ".\nException occurred parsing action at StepKey \"" . $parsedStep->getStepKey() . "\""
+                );
             }
         }
     }
diff --git a/src/Magento/FunctionalTestingFramework/Util/TestGenerator.php b/src/Magento/FunctionalTestingFramework/Util/TestGenerator.php
index 7afbfb5e6..533e09a51 100644
--- a/src/Magento/FunctionalTestingFramework/Util/TestGenerator.php
+++ b/src/Magento/FunctionalTestingFramework/Util/TestGenerator.php
@@ -1577,7 +1577,7 @@ private function generateTestPhp($test)
         } else {
             try {
                 $steps = $this->generateStepsPhp($test->getOrderedActions());
-            } catch (TestReferenceException $e) {
+            } catch (\Exception $e) {
                 throw new TestReferenceException($e->getMessage() . " in Test \"" . $test->getName() . "\"");
             }
         }