diff --git a/dockertests/azure-functions-test-kit/pyproject.toml b/dockertests/azure-functions-test-kit/pyproject.toml
index 953a5088..c8bebcdd 100644
--- a/dockertests/azure-functions-test-kit/pyproject.toml
+++ b/dockertests/azure-functions-test-kit/pyproject.toml
@@ -10,7 +10,7 @@ requires-python = ">=3.8"
 dependencies = [
     "pytest>=7.0",
     "pytest-xdist>=3.0",
-    "azure-storage-blob>=12.19.0",
+    "azure-storage-blob==12.27.1",
     "requests>=2.31.0",
     "cryptography>=41.0.0",
     "python-dotenv>=1.0.0",
diff --git a/dockertests/azure-functions-test-kit/src/azure_functions_test_kit/plugin.py b/dockertests/azure-functions-test-kit/src/azure_functions_test_kit/plugin.py
index 32610f26..fe51b77c 100644
--- a/dockertests/azure-functions-test-kit/src/azure_functions_test_kit/plugin.py
+++ b/dockertests/azure-functions-test-kit/src/azure_functions_test_kit/plugin.py
@@ -9,6 +9,7 @@
 import os
 from pathlib import Path
 from dotenv import load_dotenv
+import pytest
 
 
 def pytest_configure(config):
@@ -30,3 +31,42 @@ def pytest_configure(config):
                 break
         else:
             print("ℹ️  [azure-functions-test-kit] No .env file found, using environment variables")
+
+
+@pytest.hookimpl(tryfirst=True, hookwrapper=True)
+def pytest_runtest_makereport(item, call):
+    """Hook to capture test failures and display container logs."""
+    # Execute all other hooks to obtain the report object
+    outcome = yield
+    rep = outcome.get_result()
+    
+    # Only process test failures in the call phase (actual test execution)
+    if rep.when == "call" and rep.failed:
+        # Try to get the test_env fixture from the test
+        test_env = None
+        if hasattr(item, 'funcargs') and 'test_env' in item.funcargs:
+            test_env = item.funcargs['test_env']
+        
+        if test_env and hasattr(test_env, 'functions_controller'):
+            functions_controller = test_env.functions_controller
+            if functions_controller:
+                try:
+                    logs = functions_controller.get_container_logs()
+                    
+                    # Add container logs to the test report
+                    print("\n" + "="*80)
+                    print("🐳 CONTAINER LOGS FOR FAILED TEST")
+                    print("="*80)
+                    print(logs)
+                    print("="*80 + "\n")
+                    
+                    # Also append to the test's longrepr for visibility in reports
+                    if hasattr(rep, 'longrepr'):
+                        log_section = f"\n\n{'='*80}\n🐳 CONTAINER LOGS\n{'='*80}\n{logs}\n{'='*80}\n"
+                        if rep.longrepr:
+                            rep.longrepr = str(rep.longrepr) + log_section
+                        else:
+                            rep.longrepr = log_section
+                            
+                except Exception as e:
+                    print(f"\n⚠️  Failed to retrieve container logs: {e}\n")
diff --git a/eng/ci/templates/jobs/run-docker-tests-linux.yml b/eng/ci/templates/jobs/run-docker-tests-linux.yml
index c8e32a87..70c4564c 100644
--- a/eng/ci/templates/jobs/run-docker-tests-linux.yml
+++ b/eng/ci/templates/jobs/run-docker-tests-linux.yml
@@ -62,7 +62,7 @@ jobs:
 
       - bash: |
           cd dockertests
-          pytest . -v -n auto --tb=short
+          pytest . -v -n auto --tb=long
         displayName: 'Run Docker integration tests'
         env:
           FUNCTIONS_TEST_WORKER_DIR: '$(Build.SourcesDirectory)/java-worker'
diff --git a/src/main/java/com/microsoft/azure/functions/worker/handler/FunctionEnvironmentReloadRequestHandler.java b/src/main/java/com/microsoft/azure/functions/worker/handler/FunctionEnvironmentReloadRequestHandler.java
index 5fbd1f67..141e09b1 100644
--- a/src/main/java/com/microsoft/azure/functions/worker/handler/FunctionEnvironmentReloadRequestHandler.java
+++ b/src/main/java/com/microsoft/azure/functions/worker/handler/FunctionEnvironmentReloadRequestHandler.java
@@ -35,8 +35,10 @@ String execute(FunctionEnvironmentReloadRequest request, Builder response) throw
 		if (environmentVariables.isEmpty()) {
 			return "Ignoring FunctionEnvironmentReloadRequest as newSettings map is empty.";
 		}
-		setEnv(environmentVariables);
-		setTimeZone(environmentVariables);
+		
+		// Set timezone and get modified environment variables with TZ adjusted if needed
+		Map<String, String> modifiedEnvVars = setTimeZone(environmentVariables);
+		setEnv(modifiedEnvVars);
 		setCapabilities(response, environmentVariables);
 		
 		return "FunctionEnvironmentReloadRequest completed";
@@ -56,32 +58,38 @@ private void setCapabilities(FunctionEnvironmentReloadResponse.Builder response,
 	}
 
 	/*
-	 * Sets the default timezone based on the TZ environment variable
+	 * Sets the default timezone based on the TZ environment variable.
+	 * Returns a modified map where both WEBSITE_TIME_ZONE and TZ are synchronized.
 	 */
-	private void setTimeZone(Map<String, String> environmentVariables) {
-		// Check WEBSITE_TIME_ZONE first, fall back to TZ if not set
-		String tzValue = environmentVariables.get("WEBSITE_TIME_ZONE");
-		String tzSource = "WEBSITE_TIME_ZONE";
+	private Map<String, String> setTimeZone(Map<String, String> environmentVariables) {
+		String websiteTimeZone = environmentVariables.get("WEBSITE_TIME_ZONE");
+		String tz = environmentVariables.get("TZ");
+		
+		// Determine which timezone to use (WEBSITE_TIME_ZONE takes precedence)
+		String tzValue = (websiteTimeZone != null && !websiteTimeZone.isEmpty()) ? websiteTimeZone : tz;
 		
 		if (tzValue == null || tzValue.isEmpty()) {
-			tzValue = environmentVariables.get("TZ");
-			tzSource = "TZ";
+			return environmentVariables;
 		}
 		
-		if (tzValue != null && !tzValue.isEmpty()) {
-			try {
-				TimeZone timeZone = TimeZone.getTimeZone(tzValue);
-				TimeZone.setDefault(timeZone);
-				System.setProperty("user.timezone", timeZone.getID());
-				WorkerLogManager.getSystemLogger().log(Level.INFO, 
-					String.format("Set default timezone to: %s (from %s environment variable: %s)", 
-						timeZone.getID(), tzSource, tzValue));
-			} catch (Exception e) {
-				WorkerLogManager.getSystemLogger().log(Level.WARNING, 
-					String.format("Failed to set timezone from %s environment variable '%s': %s", 
-						tzSource, tzValue, e.getMessage()));
-			}
+		// Set the JVM timezone
+		try {
+			TimeZone timeZone = TimeZone.getTimeZone(tzValue);
+			TimeZone.setDefault(timeZone);
+			System.setProperty("user.timezone", timeZone.getID());
+			WorkerLogManager.getSystemLogger().log(Level.INFO, 
+				String.format("Set default timezone to: %s", timeZone.getID()));
+		} catch (Exception e) {
+			WorkerLogManager.getSystemLogger().log(Level.WARNING, 
+				String.format("Failed to set timezone '%s': %s", tzValue, e.getMessage()));
 		}
+		
+		// Synchronize both environment variables to the same value to prevent race conditions
+		Map<String, String> modifiedVars = new HashMap<>(environmentVariables);
+		modifiedVars.put("WEBSITE_TIME_ZONE", tzValue);
+		modifiedVars.put("TZ", tzValue);
+		
+		return modifiedVars;
 	}
 
 	/*