The flour or breadcrumbs prevent the meatballs from desintegrating when frying, it does soak and form a crust, but it is something you do briefly, a sautée in french or stir fry, then you pass them to the pan where you are going to boil them unless it is a small quantity when you could even do it by lightly frying in the pan you are going to use for cooking (if quantity is big, you have to do it in a different pan to avoid overcrowding, as the whole idea is to create the crust that will soften later in the boiling, and not be noticed, but helps to keep their shape).
Go light on the softened bread, some people here use dry crumbs for the mixing but that gives you a definitely "drier" texture and my meatballs are very popular with children in general because they are soft, but not too soft. The secret is the old spanish way, the briefly soaked bread.
Good luck!