The outdated version of snakeyaml contains a Denial of Service vulnerability, which can be prevented by updating to version 1.26 or higher. Parsing YAML files in Java with snakeyaml is straightforward and can be done in two ways: the generic way or parsing to a specific object. However, both methods can lead to memory overloads when dealing with complex data structures like YAML bombs, which can cause Denial of Service attacks. Updating to a newer version of snakeyaml resolves this issue by limiting the number of aliases for non-scalar nodes, preventing heap overflows and application crashes. It is essential to keep track of library dependencies and regularly scan for vulnerabilities to avoid such issues.