If the target of Volatile Fault's last ability is illegal as the ability tries to resolve, it won't resolve and none of its effects will happen. You won't create a Treasure token.

If Volatile Fault's ability resolves, the target nonbasic land's controller gets to search for a basic land card even if the land wasn't destroyed by Volatile Fault's ability. This may happen because the land has indestructible. In this case, you'll still create a Treasure token.