This machine allows European developers to do localizations and tests, most of these developers (also) released their games in North America - hence the "U/C".
Miraculously, it reads PS2 games (master discs and originals) in the correct region, therefore a PAL game in PAL. It also plays ALL PS1 games, has any region in NTSC!
As long as the correct (hidden) settings are used on the machine and supports connected TV. This isn't much of a problem these days, as most TVs are digital and use RGB instead of a color frequency.