In addition to getting out mineral compounds, the soaking helps loosen any clay "dust" that might be left over from firing/shipping. The soak/dry is basically a way of gently washing the pot (and all of its tiny pores) without scrubbing it.

As to the temperature, vegetable oils can even polymerize at room temperature; heat merely speeds up the process. So choosing a low heat like 350° F, and a long time like 2.5 hours, is basically just a "low and slow" way of achieving the same polymerization as a higher heat for a shorter time. However, I suspect that by staying below the smoke point of the oil, you're going to not get that deep black carbonized look associated with cast-iron seasoning, but a much lighter-colored, low-carbonization seasoning that is nevertheless fully polymerized.

As to the choice of oil, olive oil specifically has one of the highest ratios of monounsaturated fats to polyunsaturated fats, so there's fewer carbon bonds available to cross-link for polymerization (meaning polymerization will be slower than with an oil higher in polyunsaturated fats). However, I suspect that u/Corvis_74 is right that the choice of oil is probably not the result of rigorous terracotta-seasoning research.