It was a problem with our dragon courier code and there happened to be multiple dragon raids going on today that triggered the issue and the crashes. From Schaf from Discord:
gruenes_schaf Today at 5:55 PM disabled the couriers until it's fixed root cause for this freeze aka deadlock has been found fix will be tried tomorrow
gruenes_schaf Today at 6:15 PM the dragon isn't spawning infinite adds but apparently there was an issue the entire time that spawning a mob could potentially cause a dead lock (which is the freeze, ie mobs disappear but lamps are green) and the couriers just happen to do something special that makes it even more likely (the last 2 freezes were the 3rd/4th freezes since launch). The root cause has now been found though and a fix should be in tomorrow
We have disabled the couriers temporarily for the dragons (I believe Alb and Mid successfully killed them afterwards)
Without knowing how the back end of this game works, let alone this custom version of this game, specs don't mean anything. They obviously aren't running this on a machine with 2GB of RAM, and most problems (as illustrated by this post) aren't caused by server specs but by issues in the code.