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DISSOLVE with the LINE option will not eliminate pseudo nodes even though the arc attributes separated by the pseudo nodes are identical and the number of vertices on the new arc is less than 500. The number of nodes in the coverage sometimes increases after DISSOLVE is issued.
The reason for the multiplication of the nodes is that the nodes in the coverage are zero ("0") nodes. The node-grouping algorithm for dissolving lines groups "0" nodes by arc number. When two arcs meet at a "0" node, each arc endpoint receives a distinct separate node, and two nodes exist in the same location. When three arcs meet at a zero node, three nodes are generated, and so forth.
Run RENODE on the coverage which is to be dissolved. RENODE dissolves coincident and duplicate nodes into single nodes.