Currently, we only use TIMEOUT_ERROR in src/libs/zbxexec/execute.c and it is returned by zbx_execute(). That function is called in zbx_execute_script() (note just in case that "result" will not be populated in case of TIMEOUT_ERROR), which itself is called by execute_script(), which is called in node_process_command(). So TIMEOUT_ERROR is propagated from zbx_execute() to node_process_command(), where it is used as follows:

response = (FAIL == ret) ? ZBX_PROTO_VALUE_FAILED : ZBX_PROTO_VALUE_SUCCESS;

So TIMEOUT_ERROR will be considered a success when we execute a command from the frontend or as requested by a master node.