The "change root password" option does not revert the tty to cooked
before invoking /usr/bin/passwd.
Install a 4.3-BETA2 beta system. When sysinstall asks if you want
to make any last minute changes, select "yes" and then try to change
the root password. Notice that the output from /usr/bin/passwd is
missing carriage returns and that you must use ^J to terminate
lines. Reboot and notice that you can't login using the password
you just entered...
Jordan messes with sysinstall, it would seem..
I cannot reproduce this - sysinstall does indeed revert the tty.