In theory, that's how it happens in Firefox. But when you have a bug in the core of the product (the network stack), there isn't much that the rest of the product can do to isolate from it.
Yes that's what you get when you have one thread for all network communications. The network stack did not fail, only the sole network thread got stuck. From the write up I understand if there was another thread for communications firefox would only fail to communicate with telemetry service but firefox would be able to function as users needed.
"This is why users who disabled Telemetry would see this problem resolved even though the problem is not related to Telemetry functionality itself and could have been triggered otherwise."