I converted the cue/bin into a EBOOT.PBP for PSP and it works beautifully.

This is the command-line I used to convert it and install it on my PSP:
./pop-fe.py --psp-dir=auto --game_id=HBRW00099 --title=Sonic ps1-sonic/GAME.cue

And it works absolutely beautiful.

The reason I have to specify --game ...

Very nice. Disclaimer: I am the maintainer of pop-fe, a utility to convert cue/bin into PS Classics for the PSP/PS3 and more.

I play most of my PS1 games on a PS3 nowadays so I have tooling to convert PS1 games to play on the PS3 with nice cover graphics and everything.
I see in your system.cnf you ...