Why would you use the Oracle supplied Java?
Because Apple stopped supplying the upgrade with the 2012-006 release. I personally have not used the Oracle supplied Java.
I have never had an "immediate reboot" on OSX. Kernel Panics go to a very distinctive error screen that requires a power cycle. There is nothing immediate about it.
I have never had one either, before this. It is like the power is interrupted for a moment.