If an error is logged as a result of the Freeze Diagnostics this should be handled by the onLogError event handler so the user can add code to set how the test reacts to the freeze.
Currently this is not handled(confirmed by smartbear support) which makes the Freeze Diagnostic tool almost useless since the user cannot program the test to react to the freeze. The test just ends, which basically no different than if the freeze diagnostic is off.
This is very similar to the process crashed message also ignores the event handler.
https://community.smartbear.com/idea/testxcompletefeaturerequests/onlogerror-event-handler-should-handle-process-crashed-message/233461
Really all errors should go through event handler or else it just become this guessing game of when it will and when it won't work...even if the issues are documented as they are with the crash error.