hi Adrian
thank you for the comment. I had a look in commits log and it looks that '-c' was there since the beginning in 2008/09/10 in script 'init-live.sh' and then moved in 'finish.sh' in 2011/12/08.
I reproduced the issue by using qemu and I described how I did it in detail in bug #15716.
After I applied the change I tested both busybox and packagegroup-core-base-utils. The boot was successful in both cases.
I will wait for more comments and then I will extend the commit message and send a v2.
Br
Christos