I've seen the yellow 601s on x100 Power Macs before, but unfortunately most were broken physically.
Why is there a VLSI ARM CPU next to the PowerPC?
Good question. I'd guess that it likely functioned as the bridge between the 60x bus and the '040 bus, with the ARM core performing operations such as byte reordering or translation, and maybe handling the transition between the 68k and PPC environment via the control panel.