I had the same issue. Try playing offline and rename .prx files from "burn" to something like "custlvl" or whatever u want.
I appreciate the response however I was using the new level from Skater1014 which seems to be for this new custom level system, I have it appearing in the game menu but selecting it still crashes the game straight away.
Now that I think about it, it could be that it used to use the old replacing Burnside method and something went wrong while porting it.
In case it isn't blatantly obvious, I'm not a level maker of any kind so I'll use that as an excuse if I seem..bit dumb
if you spit jam in someones face they will think they are dying, spit more jam in their face they will really think they are about to die, knock them out right after and they will just assume they are dead. You just read a load of pointless babble <3