systemd-volatile-root.service is a service that replaces the root directory with a volatile memory file system ("tmpfs"), mounting the original (non-volatile) /usr/ inside it read-only. This way, vendor data from /usr/ is available as usual, but all configuration data in /etc/, all state data in /var/ and all other resources stored directly under the root directory are reset on boot and lost at shutdown, enabling fully stateless systems.
This service is only enabled if full volatile mode is selected, for example by specifying "systemd.volatile=yes" on the kernel command line. This service runs only in the initial RAM disk ("initrd"), before the system transitions to the host's root directory. Note that this service is not used if "systemd.volatile=state" is used, as in that mode the root directory is non-volatile.