Laser cladding provides advanced surface treatment capabilities for enhancing the properties of components. However, its effectiveness is often challenged by the formation of hot cracks during the cladding process. This study focuses on the formation mechanism and inhibition of hot cracks in a novel cobalt-based alloy (K688) coating applied to 304LN stainless steel via laser cladding. The results indicate that hot crack formation is influenced by liquid film stability, the stress concentration, and precipitation phases. Most hot cracks were found at 25°–45° high-angle grain boundaries (HAGBs) due to the high energy of these grain boundaries, which stabilize the liquid film. A flat-top beam, compared to a Gaussian beam, creates a melt pool with a lower temperature gradient and more mitigatory fluid flow, reducing thermal stresses within the coating and the fraction of crack-sensitive, high-angle grain boundaries (S-HAGBs). Finally, crack formation was significantly inhibited by utilizing a flat-top laser beam to optimize the process parameters. These findings provide a technical foundation for achieving high-quality laser cladding of dissimilar materials, offering insights into optimizing process parameters to prevent hot crack formation.