The pattern I've noticed is that it only crashes if Kerah is successful in hitting you with magic or a blast from her sword, and if you try to change any of your PC's actions mid-combat.
So here was my stratagy, and it worked! During the scripted dialogue between Kerah and Cet, retreat to a far corner of the hall, and keep a pillar between Kerah and yourself. Make sure that someone has the holy water equiped and has the USE action selected before the fight. Dodge her magic by ducking around the pillar. After she has taken her shot, approach her tangentally, so that you can dodge her second shot too. Then get in close and start hacking away, but don't let your character with the holy water take his turn. Rather, when that character's turn is up, circle away, dodge any magic Kerah may send, let the combat cycle clear, and come back and fight some more. After taking some damage in this manner, Kerah will momentarilly change back to her old self, and tell you she's thirsty. Only here should you use the holy water on her.
After this, the crashing is done and you're safe.
Quite a process, but it works. Good luck.
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