@quta you got it almost exactly right except CE does not bundle a custom uboot except for C2/N2/LePotato.
When you press the reset button during bootup then recovery mode is initiated and during that process the bootloader searches external media for aml_autoscript.
In aml_autoscript we first tell the bootloader to reset the enviroment partition back to its defaults and then to load our kernel and dtb and to always attempt to load them from external media first everytime the device boots, this is then saved to the environment partition that uboot reads on every boot up.
It sounds more complicated than it actually is but needless to say aml_autoscript is only read and its contents executed when that button is pressed.
You only have to do this once each time you switch to whatever OS you choose to run and if your running CE from external media then you most certainly do not have to reinstall Android and lose all your data.