How does the timeout help? Expose the lack of progress to the user and give them a way to give up; if they choose to walk away, then you stop. The only timeout should be in the head of a human that can make real decisions about how long too long is. The real problem: me knowing that if the software would have waited a bit longer, it would have worked. Your timeouts just cause more busy work and are often the root cause of snowball effects.
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How does the timeout help? Expose the lack of progress to the user and give them a way to give up; if they choose to walk away, then you stop. The only timeout should be in the head of a human that can make real decisions about how long too long is. The real problem: me knowing that if the software would have waited a bit longer, it would have worked. Your timeouts just cause more busy work and are often the root cause of snowball effects.