I think I understand maybe.
That input to the 74LC is USB_HOST_ENABLE
So I think what's going on here is:
1. When 5V is coming in through the USB, it can pass through the PFET body diode regardless of whether it's on or off.
2. When the device is a host, the PFET gate is pulled down, turning it on. This opens the path for the 5V rail to be connected to the USB to power external devices.
3. When the device is a slave, the PFET gate is pulled up, turning it off. As stated above, even when he FET is off, it still conducts through the diode, so the USB can supply 5V to the system, if available.
4. And I guess the resistor there pulls the gate up to turn the FET off until such time as the microcontroller is able to assert the host pin high or low to set the PFET into a known state.