here's what happens with the physical board... I sort of feel like you guys know this already but since you don't have hardware, maybe not? Anyway I hope this answers the question.
The GNet motherboards come with bios data already installed, the 'bios' chip socket is empty for normal play. You close a jumper on the physical board, drop in the modbios chip, and turn on the system without a game connected. The motherboard runs what id call a 'firmware' update, pulling data off the modbios chip and seemingly editing the existing bios data. Once the flashing is complete, you remove the modbios chip and jumper. you never need it again.
No idea how that translates to doing this in MAME, but I hope that's helpful a small bit.
Edit: also when you change games, the game data loads from the CF card and the data also goes through a loading period before it's playable. Presumably data is loaded from the CF card to the board itself.