I am playing from an image, as I do not want to risk scratching up my discs. It does the same thing when I do use my discs.
Saving by the game's built-in mechanic is what freezes the game. Save states are fine. However, when it brings up the save screen (at a telephone), the game freezes. So, as it stands, I cannot play through the game with traditional saves and I cannot pick up items from chests and lockers.
The game does work properly in pcsx, as I recently found out.