It looks like the problem is related to the new debug feature “Show method result after a step operation”:
See the thread Eclipse Oxygen – Debugging Issue on the Eclipse forum:
The workaround is to go to
Preferences -> Java -> Debug and disable the option
“Show method result after a step operation (if supported by the VM; may be slow)”.
See also the bug report in the Eclipse Bugzilla Bug 531706 – Oygen.2 com.sun.jdi.InternalException: Got error code in reply:35 while debugging