I happened to stumble across this when I decided to max out the AI's reversal-frequency sliders "on a lark". I had grown bored with how easily I could handle the Legend-difficulty AI on default settings.
After maxing out the AI, I played ONE match...and didn't even get to finish it. It was my two Mewtwo against The Rock and Justin Gabriel (another CAW). After a bit, The Rock used Kip-up, and gained his Finisher state. He caught me in a grapple, and I regained control...then the game froze! Apparently, The Rock was going to use his Rock Bottom finisher, but I countered...which led to the game freeze.
A similar occurrence happens when I use the same settings, but attempt to use a finisher on the AI. If I succeed in landing it...the game freezes.
There is a way around this, though--I could set ALL references to m_max_time in the misc.pac and PreLoad.pac to 0, thus completely eliminating all finisher states entirely (I think). Thus, as soon as a signature move is used, it would reset one's phantom "finisher state" immediately back to default (50 percent momentum). That would also possibly extend matches a bit longer, and I haven't seen very many game freezes related to landing a signature move.