I've got this issue on CD32: I don't think sky should behave like that. After getting to the monster (a sort of Franklenstein) I got killed and the game just froze. Using UAE embedded in Amiga Forever. Thank you. 
This happens in WinUAE if you use certain settings, specially "fastest possible" and cycle-exact off. But we're not sure of the exact settings that cause this. At the moment I'd recommend using FS-UAE instead, with FS-UAE Launcher, it's the only one so far that got CD32 100% right, as shown in Amiga Bill's livestream from Sunday (the area you're showing starts at 03:12:35 on the livestream link) . But it'd need to convert the MP3 music in the ISO to WAV and edit the .cue file to match the converted file names.