I've managed to fix the "factory reset problem" on my ICOO D70GT using the adb tool.
Tablet's init script requires the busybox binary to be present in /system/bin/. It is used to mount /data and /cache partitions with specific options.
Busybox installer I used installed the new version of busybox to /system/xbin/, but it also deleted the original in /system/bin/.
It is possible to symlink the busybox binary to its original location, using the adb shell to connect to tablet from the PC:
mount -o remount,rw /dev/block/nandd /system
ln -s /system/xbin/busybox /system/bin/busybox
mount -o remount,ro /dev/block/nandd /system
After removing the USB cable and powering off the tablet it should start normally on the next boot.
If there is no busybox binary present, it should be possible to use "adb push" to copy it to /system/bin/ from the PC...