Watchdog Reset VS Power Cycle
Power cycling resets everything except battery backed RAM and ROM's to a defaulted state.  Flip flops are set (or should be) to a default state, other smart chips like communication IC's or other intelligent controllers go through their own default boot sequence.

Just resetting the processor doesn't do all that.

That is visible even on regular PC's on occasion, if something goes wonky, just restarting the OS doesn't necessarily fix it, sometimes you have to power the box down, and press the big button again.