Thank you for reporting back.
I read this thread a couple days ago and took a look at the busybox code. Before I could post, something more pressing came up and I forgot about it.
Only three paths in the Busybox rm implementation lead to a "cannot remove" message, and the gateway to each is a system call which should not return ENOSPC: lstat, rmdir, and unlink.
Now that you've gone and fixed the issue, we'll never know where the system's error handling went off the rails. Damn you.
By the way, Busybox isn't a Linux distro. It's just a single binary executable. If in the future you have another issue, please be more specific. At the very least, identify the distro, kernel, and busybox versions.
It's also useful to know when we're dealing with "ancient" software. While I was looking at busybox's code, I realized that you must be using quite an old version.
Your "cannot remove" error message was changed to "can't remove" over 3.5 years ago (Nov 2009), and the last release to not include that change (1.15.3) goes back to Dec 2009.
Regards,
Alister