As far as I can tell, the only notable thing he'd done in that year was become runner up in the Shinjin O.

That doesn't seem like a reason to be awarded such a big promotion. It's the same as the one that Seki Kotaro got for challenging for the Tengen (before he won it and was provided with 8p).

Then again, Sada is a Kansai Ki-in player, and perhaps they decided to count his Shinjin O finals appearance with more weight than the Nihon Ki-in would've done.

Probably by virtue of making it to the Honinbo league on 31st August 2020.

https://gotoeveryone.k2ss.info/news/jp/honinbo/76/

I think it's because he opened his own dojo and pulled a Gennan.

This is precisely it. Note that Onishi Ryuhei was also promoted to 7p (from 5p) for entering the same Honinbo League (see here), while Yokotsuka Riki was promoted to 7p from 3p for entering the previous Honinbo League (see here).

Thanks for the responses, chaps.