Hi there, did you have your question answered yet?
The type of procedure that your vet is recommending is quite common. It is called a femoral head ostectomy or "FHO" procedure. the indication for this type of procedure is typically any damage to the femoral head or neck. Once the femoral head is removed the femur then articulates (forms a joint) with the muscles around the hip joint. Cats do very well with this surgery as long as the surgeon is properly trained in how perform the surgery.
It sounds as though Alfie may have damaged his femoral head somehow, perhaps a traumatic injury, however a congenital defect may be present as well. Occasional the blood supply to the top of the femoral head can be damage leading to a type of necrosis (tissue death) on the capital physis of the femoral head. This damage can cause the top of the head of the femur to lift up off of the bone. It is quite painful for the cat to walk on.
This PDF describes the procedure in a dog but it is exactly the same surgery in the cat.
Hope that helps! Have a wonderful weekend. I hope that Alfie feels better soon! Take care:)