On Magic Item Creation says that
At the end of this process, the spellcaster must make a single skill check (usually Spellcraft, but sometimes another skill) to finish the item. ... Failing this check means that the item does not function and the materials and time are wasted. Failing this check by 5 or more results in a cursed item.
When a creator fails the Spellcraft skill check by 5 or more, I imagine one of two outcomes:
- The magic item is the intended magic item (or the magic item is upgraded in the intended way as with +1 longsword upgrading to a +2 longsword) but the magic item is also cursed.
- The magic item is not the intended magic item (or the magic item is not upgraded in the intended way) and the magic item's only magic is now the new curse.
Which is it? Or is there another way of reading this that's not listed above?