diff --git a/.changes/unreleased/Fixes-20250713-042047.yaml b/.changes/unreleased/Fixes-20250713-042047.yaml
new file mode 100644
index 00000000..c8e44706
--- /dev/null
+++ b/.changes/unreleased/Fixes-20250713-042047.yaml
@@ -0,0 +1,3 @@
+kind: Fixes
+body: Fix misleading warning when evaluating Jinja in dbt_project.yml fails
+time: 2025-07-13T04:20:47.898266+02:00
diff --git a/crates/dbt-parser/src/dbt_project_config.rs b/crates/dbt-parser/src/dbt_project_config.rs
index d9beb047..bac80a97 100644
--- a/crates/dbt-parser/src/dbt_project_config.rs
+++ b/crates/dbt-parser/src/dbt_project_config.rs
@@ -7,15 +7,13 @@ use std::{
     path::{Path, PathBuf},
 };
 
-use dbt_common::{
-    ErrorCode, FsResult, fs_err, io_args::IoArgs, show_error, show_warning_soon_to_be_error,
-};
+use dbt_common::{ErrorCode, FsResult, fs_err, io_args::IoArgs, show_error};
 use dbt_schemas::schemas::project::{
     DataTestConfig, DefaultTo, ExposureConfig, IterChildren, ModelConfig, SeedConfig,
     SnapshotConfig, SourceConfig, UnitTestConfig,
 };
 use dbt_schemas::schemas::{common::DbtQuoting, project::DbtProject};
-use dbt_serde_yaml::ShouldBe;
+use dbt_serde_yaml::{ShouldBe, WhyNot};
 
 /// Used to deserialize the top-level `dbt_project.yml` configuration
 /// for `models`, `data_tests`, `seeds` etc..
@@ -149,23 +147,17 @@ pub fn recur_build_dbt_project_config<T: DefaultTo<T>, S: Into<T> + IterChildren
         };
         let child_config_variant = match maybe_child_config_variant {
             ShouldBe::AndIs(config) => config,
-            ShouldBe::ButIsnt { raw, .. } => {
-                let trimmed_key = key.trim();
-                let suggestion = if !trimmed_key.starts_with("+") {
-                    format!(" Try '+{trimmed_key}' instead.")
-                } else {
-                    "".to_string()
+            ShouldBe::ButIsnt { raw, why_not } => {
+                let error_msg = match why_not {
+                    WhyNot::Custom(message) => message,
+                    WhyNot::Original(error) => &error.display_no_mark().to_string(),
                 };
                 let err = fs_err!(
-                    code => ErrorCode::UnusedConfigKey,
+                    code => ErrorCode::SerializationError,
                     loc => raw.as_ref().map(|r| r.span()).unwrap_or_default(),
-                    "Ignored unexpected key '{trimmed_key}'.{suggestion} YAML path: '{key_path}'."
+                    "Failed to parse `{key_path}`: {error_msg}"
                 );
-                if std::env::var("_DBT_FUSION_STRICT_MODE").is_ok() {
-                    show_error!(io, err);
-                } else {
-                    show_warning_soon_to_be_error!(io, err);
-                }
+                show_error!(io, err);
                 continue;
             }
         };