Anton Rang believes he has the explanation. If the explanation is correct, it seems general enough that we may also expect to see it in other situations: "There is a routine in the program which looks for the CD-ROM by scanning the volume (VCB) queue. It looks at the first entry in the queue to verify that it is an HFS disk (signature 'BD'). If the boot disk is HFS , the signature will be 'H ' instead, and this routine will return without going further (and finding the CD-ROM)."
To fix the problem, Anton created a patch. It only works on PowerPC machines (which are the only ones that can have an HFS Plus startup disk anyway). The patch forces the program to ignore the signature.