If you need help to understand this bug, i will be happy to provide you with my admin details so you can have a look first hand.
there is nothing to understand, it is not a bug, it is a fatal error in php... the problem of fatal errors is, you cannot handle them... so if your server ends with fatal error because of memory, there is no memory more for making some exception... Phoca Gallery cannot set some other behaviour here, and it cannot say to server: "get all your free memory to me", this is not possible... so on some servers, you can increase the memory (with help of ini_set) but of course you cannot set it too hight, in such case you can be penalized by your server hosting...so the solution can be, before you upload images e.g. from camera (3MB images) you should resize it e.g. to 1MB or less because we are still on internet and 3MB are too large... but it is not about memory, it is about cpu too... everything depends on memory, cpu, GD on your server, e.g. I am on low cost server with 12MB memory, standard settings for Phoca Gallery (ini_set in case for creating thumbnail is set to 50MB) and have no problems with creating images with 3MB (I have tried 4MB too, but only one image because I know this can slow the server for the moment, so I upload standard way 1 MB images)... So Thumbnails creating needs some memory (fortunately Phoca Gallery creates thumbnails only one time, so after creating no needs for high memory) but thumbnails are not created by Phoca Gallery, thumbnails are created by GD library which is a part of PHP and both are parts of server... so everything about thumbnails creating depends on server 
if server will stop down then no script can do some exception Jan