I assume this is a problem in Basilisk that can be replicated when running the emulator locally? Though I don’t have any memory of this myself…
My one piece of useful information around AppleTalk connections and System 7 is that the clients are backwards compatible but the servers tend not to be; when I transfer files between my old Plus running System 6/7 and an iMac G3 running macOS 9.x, I believe I needed to run the server on the former and the client on the latter to avoid it crashing. I doubt that’s applicable here, but at least now it’s out of my brain.