Cool, so my suspicion was on the right track: the shutdown is caused by the watchdogs and the chunk of code in question keeps them alive.

Thank you. Will continue to fiddle.

Success; thank you pali.

Attached is bootmenu.txt, which when copied to /bootmenu.sh allows you to get a command line as normal, no reboot, etc. I think I left out the "clear" line from pali's version - mainly because I like seeing the output of the console beforehand. (I suspect that some of the code is just uneccessary, and will probably edit the script down to strip off extra stuff. Eventually I'll figure out a way to edit preinit for those who are certain they want the console and shell regardless of whether they boot with keyboard in or out. But for now, this does the job of being a shell right at beginning of boot.
bootmenu.txt