This is not a duplicate of 11527. 11527 fixes a problem unrelated to this problem.

To reproduce:
Open panel clock properties.
Set a custom format for the tooltip and the digital clock.
Close the settings window.

Fixed with this patch, which is still valid for the latest code in git at time of writing:
diff -Naur xfce4-panel-4.12.1.orig/plugins/clock/clock.c xfce4-panel-4.12.1/plugins/clock/clock.c
--- xfce4-panel-4.12.1.orig/plugins/clock/clock.c	2016-08-12 07:54:27.000000000 +1000
+++ xfce4-panel-4.12.1/plugins/clock/clock.c	2017-07-28 11:45:01.388259000 +1000
@@ -730,13 +730,13 @@
 
       if (format != NULL)
         {
-          gtk_entry_set_text (entry, format);
           gtk_widget_hide (GTK_WIDGET (entry));
-          g_free (format);
         }
       else
         {
+          gtk_entry_set_text (entry, format);
           gtk_widget_show (GTK_WIDGET (entry));
+          g_free (format);
         }
     }
 }