I thought that initially as well, but if I go and change that sample code to make a larger move in the x axis (go wild, make it move 9 inches instead of .00x), it will execute without flaw. I can do drills all day where I rapid back and forth on any axis or any combination of axes.
If for instance I REMOVE the x move from that sample code, the y axis WILL NOT stall anymore. Conversely, doing the x axis move by itself will not cause a problem. The x axis move shouldn't really affect it (stepper should have peak torque at very very low speed), but it does.
You are right, there is certainly an inertial mass effect, but why wouldn't it show up when making rapids in any other way? Its only the high aspect ratio (between move ordinates) that draws this problem out.