Ideas
I've run into this issue as well. What I've noticed is that the game will appear to be frozen, but if you are on a multi-floor home, you can move to the floor without the puppet theater and move the camera around without issues. Whenever you move back to the floor with it, then the camera will freeze until you move far away enough from the object.
If you can get close enough to the room where the theater is in BB mode, then you can delete the floor sending it to the household inventory where it will show up as a black square.
It looks normal in the BB catalog, but as soon as you click on it the game starts behaving weirdly. It doesn't show it being held in the little hand to place it, and once placed the camera issues mentioned start and the theater doesn't display. The swatch selected doesn't make a difference.
This happens both with mods and CC and on a pure vanilla save.
I'm on MacOS Monterey 12.4 (Yeah, I know I need to update)
Mac Mini (M1, 2020)
Memory: 16 GB
I've attached an image showing how it looks in the household inventory