Keyframe the blur effect just as you would do in P Pro.
What version of Premiere Elements are you using and on what computer operating system is it running?
I see this as the freeze frame with a video fade out applied to the still, followed by the video with a video fade in applied to it.
A title is created in the Titler and positioned is above the video track and its duration extends from the start of the still fade out to the end of the video fade in. Fade in and out are applied to the Title after its creation.
The fades can be from the shortcuts or from Opacity keyframes created at the Timeline clip's rubberband level.
It is not clear why this principle should not be the same in Premiere Elements as it is in Premiere Pro.
Have you tried the above and has it not worked for you? If it has not, what are the problems that you are encountering?
If it is a matter of feature locations in Premiere Elements, I can supply very customized details.
Please review and consider.
When I replied to your question, it was as I envisioned it as described in my post numbered 1.
After a re-read, I am wondering if you had the 5 second freeze frame always envisioned as a blurred (out of focus) image for most of the image's 5 second duration, with it coming into full focus only at its end as the title leaves and freeze frame ending and video beginning. If that is what you had in mind, then I would ask you to look at...
Note title on Video 2 which spans the complete duration of the 5 second freeze frame directly below it on Video 1.
The title has had a fade in and fade out applied to it.
The Freeze Frame on Video 1 has had the fx Effects/Blur & Sharpen/Gaussian Blur effect applied to it. The Gaussian
Blur effect was keyframed so that the freeze frame stayed at max blur until 4 second point and thereafter fade to no blur.
There are 3 Gaussian Blur keyframes: first at 50 at the beginning 00;00;00;00, second at 50 at about 00;00;04;00, and third at 0 at the end of the freeze frame clip.
The other scheme for your goal was based on Opacity keyframing and placement of the files as indicated in the following screenshot.
Here I did not take the Opacity keyframes to 0 at the junction of the freeze frame and video. More like Opacity 100% to 20% for the Freeze Frame end and Opacity 20% to 100% at the video clip start.
Please review and consider and then let us know if any of that worked for you.