1: In avoiding failure, we must be careful.
2: For avoiding failure, we must be careful.
What are the subtle differences between the two sentences?
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The idiomatic way of writing that is:
To avoid failure, we must be careful
That means that in order not to fail, we must be careful.
"For avoiding failure, we must be careful" is an unusual way of expressing the same idea.
Using for in that way is normally to express a recommendation:
For a healthy life, eat fresh fruit and vegetables.
Using a gerund with for is OK, but it is more normal to use to + infinitive
For getting up the mountain, we will use crampons. [OK]
To get up the mountain, we will use crampons. [Better]
"In avoiding failure, we must be careful." Is wrong.
In avoiding failure needs to be followed by a consequence of avoiding failure. For example
In avoiding failure, we have become the things we hate.
Using in in that way should be done like so:
In [doing X], we have [created consequence[s] Y[, etc.]].