I think that's where a lot of this tension is coming from. Don't get me wrong here, I think it's totally possible that this guy could be your soulmate, as you believe. I'm not trying to discourage you. Still, taking a break can go one of two ways. You can take the break and realize that you belong together... or take the break and realize this isn't what you want. Both options are scary and make people want to skip the break altogether.
But I assure you: if you're talking about taking a break, you need to take one.
He says he wants to "work on himself" and I think you absolutely have to let him. You're fighting and are at each other's throats because you likely know you want to be together in the end, but aren't ready to make a commitment like that right now. It's an internal struggle that demands validation.
Let me tell you a little story about your Auntie G. I met my boyfriend five years ago. Neither one of us was in a place to seriously date. We really liked each other and stayed in contact for a few years, sporadically going out for drinks and making out. Two years ago, we decided we were ready to commit.
If we hadn't waited and just went for it, we might not be together right now. We were young and impulsive when we met; we needed to figure some shit out before we were ready to be the partners the other deserved.
And that's what's happening for you right now.
You need to go out and experience more of life, make some mistakes, date some other guys, and figure out if this is the man you actually want. While that's happening, I would caution against doing the friends thing right now. Trying to be friends with a man you're in love with while you see other people would be insane -- and would make it too easy to fall into old patterns, ending up right back where you started: unhappy.
It sucks when you love someone, but you have got to take a serious break. If your bond is as strong as you think, you'll wind up back together again. I promise you this. It's better to take the steps necessary in order to get things squared away in your head and heart than to grapple with a relationship that just isn't working and is making you both miserable.
Life is too short to fight every single day and walk on eggshells with the person you're supposed to feel the most comfortable with. Love should lift you up, not fill you with this self-blame and anxiety. I know it hurts and it's so much easier to beat yourself up and fight for this thing you desperately want, but without two people being 100% sure this is RIGHT and COMFORTABLE and STEADY, it simply cannot flourish. Relationships take serious work and commitment.