I debugged a little and it is having trouble switching between keyboard modes. I was able to reproduce it on the public version of EarlGrey with their tests. I filed a bug, and will follow up.
https://github.com/google/EarlGrey/issues/239

I debugged this issue, and find out that it is caused by bad synchronization.

The implementation of EarlGrey's tapKey function is as following:

[gTapKeyAction perform:key error:nil];
[[[GREYKeyboard grey_keyboardObject] taskQueue] waitUntilAllTasksAreFinished];
[[GREYUIThreadExecutor sharedInstance] drainOnce];

When typing a string, it basically types a character and wait for some amount of time (drainOnce) before typing next one. This fails in our case because the animation, triggered by switching keyboard mode, is taking longer to finish than the waiting time. So after typing ' character, EarlGrey couldn't find the next character and fails with an error.

A simple fix to the bug is to wait until UI finishes:
"[[GREYUIThreadExecutor sharedInstance] drainOnce]" => "[[GREYUIThreadExecutor sharedInstance] drainUntilIdle]"
But this simple fix would also slows down the typing speed.

I'll follow up to baxley's thread and let's wait and see how EarlGrey would fix it.

Reopening. there are todos in the code pointing to this bug. If you close the bugs the TODOs should be removed.

The following revision refers to this bug:
  https://chromium.googlesource.com/chromium/src.git/+/0cd487d900c9cb1f9fa878abb82d1f2cae6f09c2

commit 0cd487d900c9cb1f9fa878abb82d1f2cae6f09c2
Author: Mike Baxley <baxley@chromium.org>
Date: Mon Nov 27 17:11:14 2017

Update EarlGrey iPad simulator typing bug references.

There are duplicate bugs opened for EarlGrey typing on iPad simulator.
Update the TODOs, so we can close duplicate bugs.

Bug:  640220 ,703855
Cq-Include-Trybots: master.tryserver.chromium.mac:ios-simulator-cronet;master.tryserver.chromium.mac:ios-simulator-full-configs
Change-Id: I460d4809795661cb43327c3191bf7e433868b711
Reviewed-on: https://chromium-review.googlesource.com/790670
Reviewed-by: Eric Noyau <noyau@chromium.org>
Commit-Queue: Eric Noyau <noyau@chromium.org>
Cr-Commit-Position: refs/heads/master@{#519319}
[modify] https://crrev.com/0cd487d900c9cb1f9fa878abb82d1f2cae6f09c2/ios/chrome/browser/ui/browser_view_controller_egtest.mm
[modify] https://crrev.com/0cd487d900c9cb1f9fa878abb82d1f2cae6f09c2/ios/chrome/browser/web/browsing_egtest.mm

noyau@ - nice catch!

crbug.com/703855 more accurately tracks this bug in github, and other tests affected by this. I updated the references for this bug to match the newer one, and closing this bug as dupe.