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Ideally, the 'hsm init' command is used once, when you first configure your Luna HSM for use with your application, then you place the unit in service and never initialize it again. However, unanticipated situations or requirements can arise that might cause you to initialize the HSM. A simple example is that you might perform trial setups in a laboratory environment before placing your Luna system into a "live" or "production" environment.
If initialize ( hsm init ) is called when the hsm is not zeroized, the SO is required to login (must present current SO PED Key or hsm password to authenticate for the init command). The firmware erases all partitions and all SO objects. However, the cloning domain and hsm policy settings (any of which are applicable) all remain unchanged.
If the hsm is zeroized when the init call is made, the firmware performs a full initialization, including: set SO pw, set domain, set M of N.
The lunacm command 'hsm factoryReset' puts the HSM in a zeroized state. To completely start over for configuration of the HSM, use 'hsm factoryReset', then 'hsm init'.
It is not necessary to perform 'hsm login' before 'hsm factoryReset'. This is not considered a security issue because, if the application and your secured data (keys, certificates, etc.) are critical, then you would necessarily ensure the physical security of any computer where the HSM is used, and have your data safely backed up. In other words, anyone who can gain physical access to the HSM, and issue the 'hsm factoryreset' command without your authorization, is only destroying the HSM contents - not viewing them or altering them - which they could also achieve by inflicting physical damage (given that you have permitted them to reach the HSM anyway, in which case you have real security concerns to address).