The pull dump is in the T at the entrance point to the bladder. There is a diaphragm in the T facing upwards. By pulling on the stainless steel wire, you are opening the diaphragm.

For some it is just more convenient to pull a few inches downwards and have the air escape at the highest point rather than having to raise the inflator mouthpeice exit up.

As to downsides, it is another diaphragm to fail, but if it fails catastrophically, you would have to realize exactly what is happening and rotate around so the exit t is not the high point.

I haven't heard of a failure in that mode yet, but I am sure it has happened.