From Valve Developer Community
Always collapses the named bone, regardless of how it's used. Vertices or attachment points that are connected to the bone are reconnected to the bone's parent.
Note:The model builder will now allow the animator to change the bone hierarchy between animations, at least in the source. The hierarchy is unified into a single fixed hierarchy for playback, but it’s often easier to change this for certain hand animation tasks. The hierarchy is defined by the first instance of the parent->child relationship.