If /var/log/radius is removed, freeradius will fail to start by init script because the init script checks for this directory. This is bad behavior because freeradius can be configured to log to syslog instead of files, in which case logs can be configured to go anywhere, not just /var/log/radius. Syslog also alleviates the need for the ugly hackery in the init script which goes and changes file ownerships, modes, etc. This is observed with net-dialup/freeradius-2.0.5
Fixed in net-dialup/freeradius-2.1.12.