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What was oulawed in most states were "Widowmakers"; cars with no end platforms and side entry. Also, many states outlawed the use of "Bobber" cabooses. The use of such a car on a short line would likely indicate a logging road where the conductor was more of a timber boss who needed to have cables and other gear to secure logs on the train. On a normal short line some accommodation for passengers and way freight LCL would be more likely needed.
The railroad had these caboose bodies, and couldn't run them as they were, so repurposed them?
Sheffield & Tionesta Railroad ran from 1900-1942. They were using a pair of wood, open-vestibule, ex-PRR passenger cars up until the day of abandonment.
How did you abandon a railroad in 1942? I do not disbelieve you that it was abandoned, it just seems strange to me that the War Production Board would have allowed it. There must have been no customers on the line of any value to the war effort. I was surprised to learn that railroads actually scrapped locomotives during that era (Buffalo and Susquehanna Atlantics, for three). During that war, the railroads were using anything that would roll or move. I have seen photographs of Class I trains with cars that had arch bar trucks, which had been banned in interchange by 1939. As a rule, if it moved, the railroad found a use for it.