Thank you for posting this example.
I was able to duplicate your crash using both LV 7.0 and LV 7.1.
I was able to work-around it by first deleteing the "null strings" ("") specifier you included with your Idle state.
After that I was able to do the case-insensative match. Then I went back and added the null string ("") to the idle case with no errors.
I was not able to recreate this issue from scratch with LV 7.0 or 7.1.
If you have backups that reflect the "before and after" states, you may want to pass those along to NI support. If you do not, we are just going to have to call this a bug in the editor and keep our eyes open for similar issues.
Ben