There's a few reasons for utilizing this method. First, you'll end up with a juicier meatball, as it is cooked in liquid, thus retains some of that liquid. Secondly, it'll be rounder and more plump because it was cooked in a liquid. 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.
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