Assuming a sensible ambient, that sounds unnecessarily warm for a stepper motor which is mostly stationary and even when moving does little work. However it could just be designed without a reduced holding current.
If it doesn't work with motor #2 then you'll need to start measuring things. My vintage CNC, had extra and missing steps caused by noisy power supplies, drooping power supplies, vibration sensitive connectors and interference from the spindle inverter.
Other random thoughts:
If X,Y are driven by steppers what is their operating envelope.
If theta should have current reduction and doesn't anymore, perhaps the driver is also over temp.