It's not just limited to this password. Most password that have the reset bit set and a valid checksum will do the same thing as far as I can tell. For example,
----- -----
----- ----l
makes it lock up as well.
But
MAKING MAH3DS
-CRASH ISCOOj
, which has the reset bit set and a valid checksum makes the game crash, but the emulator and 3DS functions still work, so there must be some other reason... Maybe some of the Unknown Function bits.
EDIT: Okay, what the hell. I'm not sure what happened, but the Restart Game button stopped working and now Metroid is permanently broken. One of my codes must've broken the emulator or something... I'll try fixing it by redownloading >_>
Yup, redownloading fixed it. I wonder what caused that.