Ok, I'll check to see what's going on, it looks like you've tried hard, so hopefully I can fix your problem.
Edit: Well, I think I know what the problem is, the event works correctly, the problem is that right after the phrase ends "you will have to level up with me".
The game tries to load a fairly large image, and an animation, from that image, so if your computer is not able to process it I guess that's why it gives that problem.
I just tested it and it works as it should, I think I will have to make a smaller version, but it will be another time. (It was an experiment to make such big animations, but since Laura's butt shaking dance worked, I thought it would be no problem).
And by the way, I'm not saying your equipment is good or bad, there are people who have had problems even with a monster equipment.
The truth is I have no idea why it happens.

For some it works and for others it doesn't.