I do think this is was happening, so this bar brawl error can cause any kind of errors we are seeing here (althought there are other issues like the people being drawn to lots):
TestBarBrawl probably test if it can do a bar fight somewhere (again, just my assumption), that routine is faulty and causes the game to bounce. Now whatever is happening in your game at the moment can cause the game to corrupt. This can be Sims or objects or whatever. I also believe that once something is corrupted in your game, it causes other errors to occur cause if a Sim wants to interact with such a glitched Sim, he also glitches or seems frozen in place (for he's just waiting for the other Sim to be available for the ready for the interactions which the other Sim never is). This in the long run will affect your whole game making it virtually unplayable.
Overwatch prevents this bouncing of the game, so I think atm, the game is not playable without that mod (there are other issues that are corrected with other mods, but Overwatch will help you with the most severe ones atm).
I have to add, that I myself have not been playing the game in a long while (playing Medieval now which I am enjoying very much), so this are all just information an my computer background (yes, I have a degree in computer science) that leads me to those conclusion. I have no insight into the code myself and repeat what I think Twallan is telling me (you know, there's always that language / cultural barrier as well).
@45rpm: Did you ever try blunote00s instructions here: http://forum.thesims3.com/jforum/posts/list/217955.page ? Mine are all German so that won't help you much since I don't plan on translating them since blunote and MTS already have them.
