When an SR-TE LSP with Seamless-BFD enabled, the BFD sessions are established between the routers along the path to detect any failures quickly. If a failure happens in the path, the router will stop forwarding the traffic and send a BFD control packet to the head-end router. In this case, R4 failed, BFD sessions will detect the failure and send a message to the head-end router, but since R4 is a loose hop, the path doesn't have to be re-calculate. The head-end router will continue forwarding traffic to the current next-hop, R2, which will be discarded at the point of failure (R4) as it doesn't know about the failure. And the traffic will not be redirected to R3 after IGP reconvergence.