Yeah, see if it makes a difference. I think you should be able to use software flow control on the esp32, but don't quote me on it.
Also, it's kind of weird you're getting data in from the sensor if it does rely on XON/XOFF signalling, so I'm really not sure if this is part of the problem at all. But I guess we've ended up in the territory of long shots anyway, so might as well pursue this lead, too...