The DVD Drive cable connector is not only a power cable, but it also has signal pins that go to the SMC to detect when to eject the DVD drive for example.

Image here is courtesy of https://brandonw.net/consoles/xbox/

In order to actually load an application from the DVD the console must detect a HDD. It does not need to be formatted but it does need to be functional and not corrupt.

This means you can use a fully working hard drive with dashboard files, or an unformatted drive for example, and still load from DVD. But without a drive present you will get error 07.

If the HDD is not formatted with the right partitions and the DVD you are loading wants to write to it (such as the Xbox Installer) it will hang indefinitely or fail with something like Error 21, so really it is advised to have a fully working drive.

Be careful when using an upgraded SSD SATA hard drive. Using adapters other than Startech very often prevent the DVD drive from then loading discs, sometimes original, sometimes only copies, but it is known.

Make sure to use Startech brand.