It could be an experiment in storytelling. The author might be curious about how the plot of the first book would unfold without Harry's actions. This can lead to some interesting twists. For instance, the Philosopher's Stone might be found or lost in a completely different way without Harry's involvement.
One possible reason could be a misinterpretation of his character. In the original series, Harry Potter doesn't hate Muggles at all. But in this fanfic, perhaps the author wants to explore a 'what if' scenario where something drastic has happened to make him have such feelings. Maybe he's been betrayed by a Muggle - in the fanfic world, this could be a made - up situation that sours his view on all Muggles.
Perhaps in this fanfic, there has been some major plot twist that makes Harry believe that bowing to Voldemort is the only way to save his friends or the wizarding world. For example, Voldemort may have threatened to kill all of Harry's loved ones if he doesn't submit, and Harry is sacrificing his pride for the greater good.
One reason could be the strict control by the official copyright holders. They might be worried about fanfic diluting the official brand or misinterpreting the original story. Another factor could be some fans' purist view. They only want to stick to the original works by J.K. Rowling and consider fanfic as something not in line with the 'true' Harry Potter universe.
Maybe it's a dare. In the wizarding world of the fanfic, there could be a bet or a dare among students that led Harry to do this. It's a way to show his bravado and willingness to take risks, even if it means wearing a dress for Draco.
Well, one reason could be that he was poisoned. In the world of Harry Potter, there are many poisonous substances. A fanfic writer might create a scenario where Harry is unknowingly poisoned, and this causes him to throw up blood as his body tries to fight off the toxin. Another possibility is that he has some sort of internal injury from a fight. If he got hit by a powerful spell or a physical attack during a battle, it could lead to internal bleeding which results in throwing up blood.
Some people might do it for shock value. They want to create something that is completely different from the original and get a reaction from others.
Maybe the writer wants to be different and create a shock factor. By making Harry a dark wizard, it goes against the common perception and grabs attention.
Another reason could be related to Harry's own personal choice or mental state. He might have had some sort of premonition or fear about the tournament. He has already faced a lot of danger in his young life, and the idea of the Triwizard Tournament, with all its unknown and potentially deadly tasks, could have made him decide not to compete. He might also be dealing with other personal issues, like problems in his relationships with friends or teachers that distracted him from wanting to take part.
One possible reason could be a misunderstanding. Maybe Lupin did something that Harry misinterpreted as betrayal or negligence. For example, if Lupin was forced to keep a secret from Harry for his own safety, but Harry found out in a way that made him feel deceived.
It could be that Harry finds out about Dumbledore's secrets regarding the Deathly Hallows. If Harry thinks Dumbledore was more interested in the Hallows for his own purposes rather than for the greater good, it might make him hate Dumbledore.