WORKAROUND 1:
Close the Navigator pane if not using.
WORKAROUND 2:
Utilize Workspaces and close Toad on a regular basis.
WORKAROUND 3:
If Toad is 32-bit, uninstall 32-bit and install 64-bit version (this will require a 64-bit Oracle client). The 64-bit version can be downloaded here. Note: This is only a workaround because 64 bit Toad will be allowed to use more memory in general. The issue could still occur. Workaround 2 still applies in this case.
RESOLUTION
Issue fixed in version 12.9. The latest version of Toad for Oracle can be downloaded here.