The “holdopen” delay is an additional delay that keeps the palette open for a specified time when it is opened programmatically; if the mouse does not move over it in this time it automatically rolls back up.
PaletteHoldopenDelay does not affect all palettes though probably because not all development teams at Autodesk knows about PaletteHoldopenDelay. You can see the effect with the palettes Properties, Quickcalc, External References, Sheet Set Manager, Markup Set Manager, Visual Styles Manager set to auto-hide. Try for example CTRL+1 one or two times. But it seems to only affect External References when starting AutoCAD. This was found trying with AutoCAD 2008 SP1.