Comment by MobiusHorizons

I believe the goal is to defeat the compiler trust thought exercise where a malicious compiler could replicate itself when being asked to compile the compiler. Since this produces human readable code instead of assembly, the idea is it allows bootstrapping a trusted compiler, since pnut.sh and any output shell executables are directly auditable.

I suppose the trust moves to the shell executable then, but at least you could run the bootstrapping with multiple shells and expect identical output.