Nope, there is no truncation error. A truncation error would be a violation of the input or output column definitions. The truncation is done by the defined data transformation, basically doing outputcolumn = LEFT(inputcolumn, 20). So at no time are either the input or output column lengths violated.

Your argument that an error should be thrown in spite of the intermediate transformation that makes the value legal would be like saying the expression SQRT(ABS(x)) should throw an error for negative values of x.