Abstract Observations of gravitational waves (GWs) from compact binary coalescences provide powerful tests of general relativity (GR), but systematic errors in data analysis could lead to incorrect scientific conclusions. This issue is especially serious in the third-generation GW detectors in which the signal-to-noise ratio (S/N) is high and the number of detections is large. In this work, we investigate the impacts of overlapping signals and inaccurate waveform models on tests of GR. We simulate mock catalogs for Einstein Telescope and Cosmic Explorer and perform parametric tests of GR using waveform models with different levels of inaccuracy. We find that the systematic error in non-GR parameter estimates could accumulate toward a false deviation from GR when combining results from multiple events, although a Bayesian model selection analysis may not favor a deviation. Waveform inaccuracies contribute most to the systematic errors, but multiple overlapping signals could magnify the effects of systematics owing to the incorrect removal of signals. We also point out that testing GR using selected “golden binaries” with high S/N is even more vulnerable to false deviations from GR. The problem of error accumulation is universal; we emphasize that it must be addressed to fully exploit the data from third-generation GW detectors and that further investigations, particularly in waveform accuracy, will be essential.