Init must run as PID 1 can mean another process is using PID 1 .
Possible : you booted with initrd.gz but Puppy Linux does not need initrd.gz (anymore) in PUPMODE=2 Full install to HDD .
The initrd.gz has code to switch to console mode which would /bin/sh make PID 1 .
The /sbin/init launches /bin/busybox init if no fsckme file detected .
Since i am working on /sbin/init
ADVANCED pup-5xx /sbin/init
This is the only possibility i could think of.