Very strange indeed! 
You might want to follow this issue also, as someone else has just opened an issue about 2.7.0/2.7.1 and ESP.reset()/ESP.restart() causing lockups.
Edit: Iām currently on the prowl for MDNS issues, and saw this interesting titbit -
It may not be an issue with mDNS but with NONOS-SDK FW.
Latest release 2.7.0 is using NONOS-SDK v2.2.1+100 (2019-07-03).
You may try with āLegacy 2.2.1ā which was previously shipped, or with more recent ones: 2.2.1(2019-11-22) is the latest.
In other words, it might be worth playing with the SDK version liked mentioned in this post. The comment suggests you would PIO_FRAMEWORK_ARDUINO_ESPRESSIF_SDK221 to revert to the SDK version they previously used, but I donāt think thatās actually right. Trawl through the history for this file to see when when the different versions of the ESP8266 Arduino core used different SDK versions.
Edit2: One final titbit for nowā¦ since you mentioned the ESP01S was working fineā¦ I wonder if itās somehow related to the still open XMC issueā¦