That is an odd one.
I very much doubt the emulator has some additional error handling so instead for things like this I might look to compression, though with dynamic recompilation I could be surprised. I don't know what the PSP has built in (I have seen built in compression vs emulator interpretation on the GBA and DS).
Outside chance it would be an emulator memory issue (some of the SNES emulator only hacks (ab)use a version of this where the emulator keeps giving memory space where the base hardware has none). I doubt it would be a timing issue for a text tweak.
Anyway two main approaches
1) You can go full debugger, follow code, figuring out what it does and why your text tweaks might cause a crash in hardware.
2) Build your hack back up to figure out when it crashes and then don't do that.
If it is compressed then decompress the original and compress it again.
After this two main approaches again
i) You copy more and more of your mod in until you get a crash.
ii) More systematic but longer.
Start by changing a few characters with ones in the same file.
Now change some characters to ones that are in your non working hack and seeing if it is those. You can do individually if you want or batches.
Pointers if you have those. Including making things larger (might be a memory limit issue)
Markup/scripting if there is that.
Don't use savestates for this as the PSP will have copied data from the ISO to RAM to work and a savestate might have that in it (data can be in RAM long before it is on screen or used).