There's a few reasons for utilizing this method:

1. You'll end up with a juicier meatball, as it is cooked in liquid. 
2. It'll be rounder and more plump because it was cooked in a liquid. 
3. You'll be 100% sure that it was cooked thoroughly without being burned.

The reason for the pan browning is just a reverse sear - purely for color/crunchiness and perhaps some flavor from a browned meat and the butter.