 Solution

Work on an open domain with $xy>0$ and $x\ne 0$, where the displayed square root is real and differentiable. Split $u=v+h$ with $v=\varphi (xy)$ and $h=\sqrt{xy}\psi (y/x)$. For the first term, the chain rule givesso $x^2{v}_{xx}-y^2{v}_{yy}=0$.

For the second term, set $t=y/x$. Its first partial derivatives areThey show $x{h}_x+y{h}_y=h$, the degree-one case of Euler theorem for homogeneous functions. Differentiating that identity with respect to each variable yieldsThe mixed partial derivatives agree here by the chain rule. Multiplying these equations by $x$ and $y$, respectively, proves the second derivative identity for a degree-one homogeneous function:Adding the results for $v$ and $h$ verifies the partial differential equationEquivalently, $h(\lambda x,\lambda y)=\lambda h(x,y)$ for positive $\lambda$, so the same proof follows directly from its homogeneous function property. The statement is local to a domain where the given expression is defined; it does not require assigning values on $x=0$.