It's probably the second type of thread. If you step down to a lesser quality thread,
put in a needle with a larger eye, and preferably one meant for metallics - these are designed to put the least friction on thread therefore causing less breakage.
Case in point, I did some "utility" quilts using serger thread, and had all kinds of problems with shredding threads. The lesser quality threads are not designed to take the high speeds and friction of a quilter.
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