Pokemon Go freezes when using Battery Saving option
Thank you for your answers @TimPenner @KevinTian. I actually found a neat way to get around this when I was browsing Reddit.
There's an app called Caffeine which prevents the phone from going to sleep (lock screen) whenever a certain application is in use (Pokemon Go). Instead it dims the screen after the timeout period that usually would cause the phone to go to the lock screen.
So now when I go jogging and I put the phone in my pocket it will stay on indefinitely plus it dims the screen after the 1 min timeout period to save battery.
As of 0.29.2 the fix is to disable Battery Save mode.
Note: the best battery saver option available is an external battery pack.
As of now there is no fix. I have the same issue often when I use battery save as well. It's just a bug that hopefully Niantic will patch in the near future.
If this happens with pokemon near you then simply relogging will allow you to catch the pokemon again.