Does SQL Server 2008 R2 always fail with a severity level 20 error with certain large text manipulation?
There's really no database involved. You can see it hits no tables. But yes we've run this &quot;in&quot; several databases and run CHECKDB against them just to be sure.

The database involved is tempdb (database ID 2).  That's where the value of LOB variables gets written.  You can see that by looking in the sys.dm_db_task_space_usage DMV (if your query weren't failing with an error, that is):

My data database context for that query was &quot;master,&quot; but notice that the database_id in the query results in tempdb.
So you could check tempdb for corruption.  This database gets recreated each time the server is restarted, so I'd be surprised if you have persistent corruption there.  Unless you're having disk issues, in which case you should consistently see errors in the Windows &quot;System&quot; Event log that indicate corruption.

All that said, it's also very possible this is a bug in SQL Server 2008 R2 SP3.  There is at least one non-security-related hotfix to that SP (KB3033860).  The errors mentioned there don't look like they match your situation, but could be related (they are assertion failures).
Unfortunately, since SQL Server 2008 R2 is out of support, this won't be fixed even if it is a bug.  Your best bet is to try and work around the problem, or upgrade.