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OK, as of yesterday my phone (a Moto Droid Z) has undergone some type of bizarre demonic possession that makes it die when I put it in my pocket. And no, I didn't drop/submerge/etc. the phone. That would make this easier to understand.

In a bit more detail, if I put the phone in my pocket for just a few minutes, the entire screen turns a strange shade of off-while and undergoes a series of increasing/decreasing brightness events followed by lines on the screen and eventually a reboot. It's completely unresponsive while all of this is going one.

These symptoms look like the screen is going bad on a physical level BUT... once the phone reboots the screen works perfectly again. No weird artifacts, touch operations work fine, etc.
I have personally tested the phone for several hours when it is left out of my pocket or any other enclosure and it will work fine for hours at a time. Put it back in my pocket: Back to crashed in just a minute or two. Incidentally, I have checked the phone and it's not overheating or anything like that. These crashes happen when the phone is idle and it's not getting too hot.

Here's my best guess: Something with the proximity sensor has gone way way wrong and when the phone detects that it is in an enclosed space like my pocket, the whole system is spazzing out for whatever reason. When it's left out, the proximity sensor is not producing the same readings and the phone doesn't crash. But that's just a guess.

Anybody else encounter a problem like this?

You have acquired Schrodinger's pocket. You won't know if your phone is dead or alive while it's in the pocket.

I'd say your guess on the proximity sensor is a good one. I had a different problem with my phone awhile ago where all the pictures I would take were in landscape mode even when I wasn't tilting the phone. I downloaded an app to recalibrate the sensor and found that one axis behaved normally and responded to the movement while the other stayed pinned all the way to one side. The problem persisted after a reboot, so I figured something broke and the sensor was just dead and gone, but after an update it just started working again. Your problem sounds like it might affect multiple different components which I suppose makes it more unlikely just to be a weird software thing, but after seeing that happen with my phone it's just hard to say. I can't tell in phones these days where software problems stop and hardware problems begin.

+1 to your guess about the proximity sensor.

I've not used an Android Motorola phone, but I think most manufacturers provide basic hardware diagnostics of the various sensors, screen, etc. If so, it would be good running through that, to see if any error is reported. This page is a decade old, but those shortcuts might still work.

*#9090# – Diagnostic configuration
##7764726 – Hidden service menu (Motorola Droid)

Also, my Samsung phone on Nougat and Oreo has an option titled "Block accidental touches" to prevent touches being registered when in a pocket or bag - if you have an equivalent option, try disabling it to see what happens.

Final point (probably unlikely, though) - is there some screen protector that covers the sensors? If so, maybe they're scuffed and causing anomalous readings?

There's an option to turn the screen off when in your pocket or when you lay your phone screen-down on a table. That might also disable "accidental touch input" in the same situations (or that would be a separate setting). Try turning off those features.