The linuxrc script from genkernel does not support launching /bin/bash as real init (after switching root). This is due to the double quotes around INIT_OPTS exec /sbin/switch_root -c "/dev/console" "${CHROOT}" "${REAL_INIT:-/sbin/init}" "${INIT_OPTS}" With INIT_OPTS empty bash gets one empty string as an argument and exits with the following error message /bin/bash: : No such file or directory which in this case causes kernel panic.
fixed with https://bugs.gentoo.org/show_bug.cgi?id=444574