Firstly, can you update System Workbench ? It might fix some issues.
Did System Workbench freeze when you open the C/C++ Build > Builder Settings page or when you are validating the changes ?
If your Makefile is in the project root directory, you don’t need to do any change. I suppose you only modified the build location. Can you attach a screenshot for me to reproduce your problem ?
By the way, if your project contains a lot of files, the indexer might be scanning all the files to enable the auto-completion and indexing (which could freeze the GUI). Try disabling the indexer (select your project > Properties > C/C++ General > Indexer, uncheck “Enable indexer”, then Apply).