I have worked on several MPC875 designs over many years and never faced the problem I am facing. If we power cycle rapidly and not wait for 10 seconds between power cycles then our code crashes after passing through boot stage and somewhere much later. Is it okay if 3.3V ramps slowly in 2 msec and then enable the 1.8V? Or is there specific sequence? The datasheet just says 1.8V must come after 3.3V.
If we wait 10 seconds and power again there are no problems. In a bad case, resetting the processor with hreset doesn't work and code continues to crash. A power off, 10 seconds pause, and power on is needed.