What stops working
The obligations. Insurance of the building, maintenance of the structure and common parts, enforcement of covenants against other leaseholders — all of them sit with the landlord under the lease, and a dissolved company performs none of them.
The permissions also stop. Consents to alter, consents to let, certificates required to register a transfer: anything that needs the landlord's signature becomes unobtainable, and that can block a sale rather than merely inconvenience it.
Ground rent is a smaller problem than it sounds. The risk is not that nobody collects it; it is that somebody acquires the reversion later and asks for all of it at once.
Why the advice is not to proceed without cover
Because the exposure is open-ended and the alternative is cheap. An absentee landlord indemnity policy covers the consequences of the landlord's absence — the obligations that go unperformed and the position if the landlord or a successor reappears.
Ask who pays. Where the problem exists, it is the seller's problem that has become yours, and an allowance on completion is a reasonable thing to seek. The Lexsure wording below shows exactly that being asked for.
Also establish what the policy actually covers, because the scenarios differ: a dissolved company whose property has passed to the Crown is not the same as a landlord who simply cannot be found.
The longer problem
Lenders. Not all will lend where the landlord is absent or insolvent, and that applies to your buyer as much as to you. A policy helps and does not universally solve it.
Resaleability follows from that. A building with no functioning landlord is harder to sell, and the problem compounds if nobody is maintaining the structure.
Where the leaseholders are willing, the real answer is structural: acquiring the freehold or exercising the right to manage puts a functioning entity back in charge of the building. It is a bigger project than an indemnity policy and it is the only one that ends the problem.