This could be raised for any number of reasons, eg. a syntax error in the query

and when it errors, then the contextmanager's __enter__ would return None, causing another error when used

This could be raised for any number of reasons, eg. a syntax error in the query

But that part is actually used as before.

and when it errors, then the contextmanager's enter would return None, causing another error when used

so any particular hint as to how improve this at all?

But that part is actually used as before.

It's not. Before, logger.exception("Failed to connect to %s`", db_or_conninfo) was in an except` block which only covered db = connect_to_conninfo(db_or_conninfo).

Now, the except block covers the whole lifetime of the context manager. It should be like this:

if isinstance(db_or_conninfo, pgconnection):
    yield db_or_conninfo
else:
    if "=" not in db_or_conninfo and "//" not in db_or_conninfo:
        # Database name
        db_or_conninfo = f"dbname={db_or_conninfo}"

    try:
        db psycopg2.connect(db_or_conninfo)
    except psycopg2.Error:
        logger.exception("Failed to connect to `%s`", db_or_conninfo)
    else:
        yield db

so any particular hint as to how improve this at all?

you need to check for None on every call to the context manager, and return early if it is

yes, right.
I thought of something like this yesterday evening but got side-tracked by other things, thx!

The last try except, i'd write it more concisely like this though:

try:
    yield psycopg2.connect(db_or_conninfo)
except psycopg2.Error:
    logger.exception("Failed to connect to `%s`", db_or_conninfo)

as discussed with val, his suggestion and mine are different.
With mine, the exception is forwarded by the yield, but we don't want that here.
So i kept his better suggestion instead.