well, I'd assume there is an electrical hw issue with your cable which freezes not only Yocto but the whole board. For instance I could imagine that shortening TX and RX could confuse the hw quite a bit. Otherwise serial communication is not a problem at all - whether you use the serial over the USB client or over the audio JACK (I built 2 cables for the audio JACK which both work fine; I know others did as well).
As you might know: In Gen2 the audio Jack serial has been replaced by a 6-pin serial connector which should it make easier to find an adapter for