Linux swapping blocks system (freeze)

I have a problem with my Debian Servers. We run 4 different server which all have Intel CPUs and 128GB of RAM. Two of them run Wheezy, two of them run Jessie. We run a Java software on those systems which is heavily using memory and could eat up all memory.

For those cases I installed a swap partition on every server which is held on a RAID 1 running on 2 SSDs.

Problem with the Jessie systems: when the system nearly runs out of memory it starts swapping. This is tuned by the vm.swappiness = 10 parameter and looks ok to me. But the swapping itself is done so heavily, that the system totally hangs/freezes. There is so much disk io done that the system is not responding anymore.

I did some tests on all systems an artificially filled up the RAM to 120% by using:

stress --vm-bytes $(awk '/MemFree/{printf "%d\n", $2 * 1.2;}' < /proc/meminfo)k --vm-keep -m 1

The system start swapping and freezes while the swapping of the 20% is running. After ~20s the system is back and usable again but during the freeze nothing works anymore.

Of course this behaviour is not acceptable for a productive system. What I would expect is that swapping has a high priority but should never use more than 90% of all system resource so that the system still can be handled somehow.

Tuning the swappiness to different values didn't help..

We're using the following kernels:

Wheezy: Linux A 3.2.0-4-amd64 #1 SMP Debian 3.2.68-1+deb7u1 x86_64 GNU/Linux

Jessie: Linux B 3.16.0-4-amd64 #1 SMP Debian 3.16.7-ckt20-1+deb8u4 (2016-02-29) x86_64 GNU/Linux

Did anyone run into the same problem and found a solution?

Edit:
Thank you all for the comments and explanations. Of course I don't want to use swap as spare memory. The 120% usage was just a test. In production, the systems uses maybe 100,0001% of the memory and already stops being responsive. In the production mode with our software running there is also a high frequency of changing data so that the system might be busy by just swapping a very small amount of data back and forth the whole time.