Hi,
In this case the if you submit and the message is outside the submit program i.e. it is called after the SUBMIT statement the job is left in scheduled status in SM37.
If the error message in triggered from program that is called in submit program the message will appear in job log and the job will be cancelled. The 'Leave list-processing' is just a control in the program but the message is what stops any further processing as it is displayed as "E".
Cheers,
Arindam