I have been seeing this too. I edit on a mac pro:
Well, first of all you cannot make higher res video from low res. You cannot upsize frame from 720 to 1080 and get good quality, your immage will be pixelated.
Second of all the data rate is different in two formats you mentioned.
So that is probably why your premiere hangs. It is trying to import your transcodes back into project panel but could not understand the format and data rate.
You can disable import fiture after transcode, but your video will not look good.