Things I figured out since I made this video:
1) It was in fact the Sonic 4 theme that caused issues, as I switched back to the Holiday dynamic theme and any flickering and freezing stopped.
2) MultiMAN tricks the disc "channel" into thinking its whatever it loaded, hence why my Splatterhouse disc looked like it was the Nier disc.
3) The PS3 will always revert to the XMB when the eject button is hit in-game as a "safety precaution."
Enjoy!
My rating is based only on how the firmware works for me, and not based on all the brick reports. The firmware worked for me, so it is reviewed as a working firmware.