Why does my Bash code fail when I run it with ‘sh’?

TL;DR: Since you are using Bash specific features, your script has to run with Bash and not with sh:

$ sh myscript.sh
myscript.sh: 2: myscript.sh: Bad substitution

$ bash myscript.sh
ffmpeg -i bar.mp4 bar.mp3
ffmpeg -i foo.mp4 foo.mp3

See Difference between sh and Bash. To find out which sh you are using: readlink -f $(which sh).

The best way to ensure a bash specific script always runs correctly

The best practices are to both:

1. Replace #!/bin/sh with #!/bin/bash (or whichever other shell your script depends on).
2. Run this script (and all others!) with ./myscript.sh or /path/to/myscript.sh, without a leading sh or bash.

Here’s an example:

$ cat myscript.sh
#!/bin/bash
for i in *.mp4
do
  echo ffmpeg -i "$i" "${i/.mp4/.mp3}"
done

$ chmod +x myscript.sh   # Ensure script is executable

$ ./myscript.sh
ffmpeg -i bar.mp4 bar.mp3
ffmpeg -i foo.mp4 foo.mp3

(Related: Why ./ in front of scripts?)

The meaning of #!/bin/sh

The shebang suggests which shell the system should use to run a script. This allows you to specify #!/usr/bin/python or #!/bin/bash so that you don’t have to remember which script is written in what language.

People use #!/bin/sh when they only use a limited set of features (defined by the POSIX standard) for maximum portability. #!/bin/bash is perfectly fine for user scripts that take advantage of useful bash extensions.

/bin/sh is usually symlinked to either a minimal POSIX compliant shell or to a standard shell (e.g. bash). Even in the latter case, #!/bin/sh may fail because bash will run in compatibility mode as explained in the man page:

If bash is invoked with the name sh, it tries to mimic the startup behavior of historical versions of sh as closely as possible, while conforming to the POSIX standard as well.

The meaning of sh myscript.sh

The shebang is only used when you run ./myscript.sh, /path/to/myscript.sh, or when you drop the extension, put the script in a directory in your $PATH, and just run myscript.

If you explicitly specify an interpreter, that interpreter will be used. sh myscript.sh will force it to run with sh, no matter what the shebang says. This is why changing the shebang is not enough by itself.

You should always run the script with its preferred interpreter, so prefer ./myscript.sh or similar whenever you execute any script.

Other suggested changes to your script:

• It is considered good practice to quote variables ("$i" instead of $i). Quoted variables will prevent problems if the stored file name contains white space characters.
• I like that you use advanced parameter expansion. I suggest to use "${i%.mp4}.mp3" (instead of "${i/.mp4/.mp3}"), since ${parameter%word} only substitutes at the end (for example a file named foo.mp4.backup).