Beesewax works great with linen. In my experience a linen string should be harder to pull apart like that, UHWPE and suchlike are extemely slippery in comparison. My first linen string string snapped at the bowyer's knot and now I avoid using it. Linen strings get quite thick so I use three ply flemish twist. The resulting string is much rounder in cross section and looks better. Regarding strength - I don't know.
Maybe you don't have enough length doubling back after the loop?
I've had some problems twisting the thick section after the loop as the bundles of strands doubling back, coming out of the top of the loop were twisted themselves (the ones that pull out on your string) and wouldn't twist together with the main string. Make sure that they're not twisted on their own like a cable but insted nicely parallel, blended with the main, long, part of the string, held together by beesewax. That way, when you actually twist the short part coming out of the loop together with the long section of the string, it forms a nice round twisted bundle you can then wrap around the other bundle like normal.
I usually hook the loop on something so that I can use both hands to twist the thicker section, especially right after the loop, as tight as possible.
As DC said, anything you're twisting shouldn't be twisted before. Indeed this is hard to put into words, in doing so we risk making no sense whatosever. I hope this wasn't too confusing and makes some sense.