The U10 performs "
power-on reset" by keeping the Hollywood's hardware reset pin low until the 3.3V rail rises above 2900mV. The reset pin is pulled up inside the GPU, so without U10 connected to hold it low, the Hollywood comes out of reset at some undetermined & unsynchronized time, based on the ramp time of the 3.3v and 1v voltage rails.
This can cause the system to behave erratically. The behavior varies a lot depending on your regulator setup and also on a Wii-by-Wii basis (silicon variation, etc)
Sometimes it manifests as the Wii taking a very long time to boot and running in "slow motion", almost as if the PLLs/clocks weren't initialized properly. It can also result in peripherals like the Bluetooth module not working. Other times the Wii won't boot at all. Sometimes you get lucky and everything works normally.
All of this unpredictability is avoided by the POR provided by the U10. Nintendo, ATi, and BroadOn designed the Hollywood to be reset on powerup in this way. It's super duper common for processors and other complex ICs, especially ones that have multiple voltage rails.