It creates a borate buffer together with the hydroxide. Although given the ratio between the two, the pH must shift all the way to the upper end. Not sure if this is the only or main reason why it's in there, but I'd expect so.
PS: it helps if you quote text from their original source because it preserves context. E.g. the D-88 formula you got from here:
https://www.photrio.com/forum/threads/kodak-direct-positive-developer.31512/ In this case, it gives essential information about the "fogging?" bit because it's mentioned as a developer for direct positive paper, and post #5 in the thread contains essential information on that aspect.
As to why hydroquinone on its own gives 'high contrast' (the question is what is exactly meant by that - high dmax or cutting off of shadow detail?) - I suspect you may have to refer to the literature and that the underlying chemistry might be complex. You could start in e.g. Mees;
https://archive.org/details/TheTheoryOfThePhotographicProcess Chapter XI might give some clues.