from what I've been able to work out. the drop happens because of something phased. I cannot get a good look at it But it seems there are city guards at the edge of the fountain near murder row and what looks like a pile of bodies. For some reason they are phased into view when you leave the spire and cause the FPS to crash until you can get close enough to the fountain for the proper phasing to occur.
Steps to reproduce the bug :
1) Take the translocation orb from Undercity to Silvermoon.
2) Head for the exit leading to the fountain outside.
3) Watch carefully in the distance. When the fountain and the entrance to Murder row become visible, you are able to see city guards in a defensive position and piles of what looks like bodies.
4) Continue to move forward through the FPS drop if possible and walk in the direction of Murder Row, jumping into the fountain to continue forward.
5) Notice when you are close enough for these npcs to phase out the framerate will jump back up to normal.