In order to avoid updating every one of our existing functions with
explicit support for sensitive values, there's a default rule in the
functions system which makes the result of a function sensitive if any
of its arguments contain sensitive values.
We were applying that default to the various type conversion functions,
like tomap and tolist, which meant that converting a complex-typed value
with a sensitive value anywhere inside it would result in a
wholly-sensitive result.
That's unnecessarily conservative because the cty conversion layer (which
these functions are wrapping) already knows how to handle sensitivity
in a more precise way. Therefore we can opt in to handling marked values
(which Terraform uses for sensitivity) here and the only special thing
we need to do is handle errors related to sensitive values differently,
so we won't print their values out literally in case of an error (and so
that the attempt to print them out literally won't panic trying to
extract the marked values).