As described in the GameXplain video below, a simple game of catch is the culprit of this game-breaking bug. To perform this soft crash, have one character use their slingshot, while the other catches the projectile. Then it is as simple as throwing and catching the projectile between Isabelle and Villager, and after a few throws the game will throw up the error message.
Apparently, the glitch only works between one Isabelle and one Villager (meaning two Isabelles and two Villagers won’t be able to do it). Strangely enough, it also only works with the slingshot projectile as well.