Ok, what you're describing is the expected behaviour then.
Note the following from the telinit manpage (init invoked from user
space execs telinit):
The RUNLEVEL argument should be [...] 1 to bring the system
down into single-user mode.
RUNLEVEL may also be S or s which will place the system directly into
single-user mode without actually stopping processes first, you proba‐
bly won’t want that.
If you run "telinit 1" instead, X will be killed as part of the switch,
and then you'll be at a root console.
** Changed in: upstart (Ubuntu)
Status: New => Invalid
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[7.10] [tel]init [s,S] does not function as expected - locks the machine
https://bugs.launchpad.net/bugs/164134
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