Apple - vm_compressor=VM_PAGER_DEFAULT in Yosemite caused freeze when physical memory was full

The issue is not that paging is actually turned off but that mode 1 is no longer an implementation of standard memory management but instead an ugly hack that prevents compression by making almost all active memory "wired", hence preventing compression but as an aside also swap.

In OSX Mavericks, I had also turned off VM compression (via the vm_compressor=1 boot-arg & reboot), because it seemed implicated in some very sluggish sessions when using a high-RAM VMWare Fusion guest. Everything seemed to work fine in Mavericks, no compression but still the expected paging.

After upgrading to OSX Yosemite (10.10.4), I was getting freeze-crashes similar to what you describe. (Specifically, after just 10-15 minutes of light web-browsing, the mouse/display/keyboard would freeze. After about another minute, the machine would spontaneously reboot. The crash report after reboot mentioned a "progress watchdog" event in all four cases.)

Fortunately, the first thing I tried was reenabling VM compression (vm_compressor=4). After 4 crashes in the first ~90 minutes of using Yosemite, there have been no crashes in the 4 days since.

So I can confirm: the vm_compressor=1 setting that seemed functional before Yosemite now seems crash-buggy. Using the Mavericks-and-beyond actual default for this value, vm_compressor=4 ('VM_PAGER_COMPRESSOR_WITH_SWAP'), seems to fix.