Spent a few minutes looking up what the 'UTXO set' is because I assumed running bitcoind as blocks only might skip the need for extra disk space.

So I was wrong, the UTXO set is list of all current unspent outputs. I think it's name confused me, it's all UTXOs not some of them.

The set is used by nodes to validate each new block, without it, the node couldn't continually audit the chain.