I dl'ed the latest build (31.01.2021) and it works ok if windowed. If I set it to full screen I get "Application not responding" after launch. It works if I switch it to full screen with ctrl+alt+return.
also console is flooded with this messages when sheepshaver is running:
Yes, there appears to be an issue when launching the latest SheepShaver and BasiliskII builds in full screen mode.
However, I do not get the message you mention. I get a black screen with spinning beach ball and need to force quit the applications. That is on macOS 10.15.7.
A similar issue was discussed in this topic: viewtopic.php?f=20&t=10392
It was solved in my 26 July 2020 SheepShaver build, but now seems to have returned.
I will ask the developer (kanjitalk755) to look into this issue.