In GS/OS 5.0.2, you get two dialog boxes when an empty 5.25-inch drive icon is double-clicked. (This also occurs when the 5.25-inch drive contains a blank or unrecognizable disk.)
The first dialog is the one you describe with the "Eject" and "Continue" buttons. The second is a dialog asking to "Cancel" or "Initialize". This is where the user has the opportunity to stop the initialization process.
Because the first dialog is dismissed only with a mouse click, the possibility of pressing the Return key too many times is eliminated. However, the second dialog defaults to the "Initialize" button; therefore, pressing the Return key causes the disk just inserted to be erased. However, if the "Cancel" button is clicked, the initialization process is terminated. Thus, there is a two-step process to invoke the initialization operation.