After building a root filesystem, changing the system banner to nothing and then doing make doesn't remove /etc/issue from the root filesystem.
This is "expected": Buildroot doesn't track the configuration changes that are made to update the root filesystem after just a "make" invocation. For example, if you remove a package from your configuration, and then run "make", then the files installed by this package in the previous build are not going to be removed from the root filesystem. It's the same for this /etc/issue thing. If the BR2_TARGET_GENERIC_ISSUE option is empty at the first build, then no /etc/issue file gets created. Otherwise, if you change BR2_TARGET_GENERIC_ISSUE after the first build, then the file will remain as it was before, until you do a "make clean all" cycle. Even though fixing this would not be very difficult, I don't think we really want to do it, since we anyway don't do it for the vast majority of other Buildroot configuration options.