How can I stop Final Cut Pro from freezing on my Mac Studio?

As Larrie says, working with iCloud files in FCP is extremely unstable and not recommended! The macOS is constantly managing iCloud files and if, for example, it sees the disc getting too full it may start offloading files from your local storage which could, potentially, even include some of your video files. You might just about get away with it for very small projects and an empty disc but not large ones.

You need to move your library or files to an external SSD.

I had the same problem. Simply editing with 1 or 2 videotracks went smoothly for days. More complex edits with 8 to 10 videotracks had the same symptoms; after 30 to 60 minutes of editing the picture stopped playing while the sound continued, then after a minute everything stopped and a little later FCP froze.

I tried all the usual tricks -and after using FCP (X) for 13 years you learn a lot of tricks- but the problem remained. Fortunately, in practice it took only a few second to continue editing: close and immediately restart FCP. Then the current timeline could be further edited for another 30 to 60 minutes without and problems. It looks like a buffer was filled up somewhere...

In my case, a possible culprit could have been Keyboard Maestro. When KM is active my Kensignton trackball regulary becomes very slow. Same sort of remedy: activate KensigntonWorks and click 'save'. 5 seconds of work and the trackball works normally again. Till out of nowhere it became very slow again. I removed Keyboard Maestro because this behavior was very annoying. Since then I haven't edit more of those timelines with 8 or more videotracks and I haven't had any more freezes, so I don't know if KM was the culprit or even whether that the problem still exists (on my setup)

NB: FCP 11, MacStudio Max, Sequoia, 64GB, external TB3 disks.

It all depends how you've organised your library so far. If all your media is within the library bundle (which is the default unless you've specified otherwise) it should simply be a matter of copying the library bundle to another drive. If the media is outside the library then you'd need to copy the library and the media to an external drive and relink. Also you can have the library and media on separate drives if you like.

I would think (although I can't be 100% sure as I've never done it) that just dragging the files to another drive will force the OS to download and copy them.

It really would be better to get an SSD - almost any SSD will be better than a spinning disc as long as it has plenty of space for the files, especially larger complex projects.

IIRC FCP and iCloud bo not play well together. Have you tried moving the files to an external SSD?

As FilRmonic says, just drag the files that are on iCloud to the new SSD. They will be copied to it. When you open FCP you will need to relink the files to the ones on the SSD.