What is supposed to be the purpose of the clay pellets?

I was told they absorb water and release it slowly so you don't get rotten roots

So really the clay pellets don't really add much...good to know! If I go with a water reserve at the bottom of the pot would the roots grow into that and risk getting rotten?

My experience with self-watering pots is that the plant puts whatever roots it wants into the water reserve to best meet its needs. I think you are worrying about rotting too much. I have had a potted bamboo in my greenhouse for a year and a half. The pot sits in a saucer. I flood the pot with water until it comes out of the drain holes and pretty much fills up the saucer. Then I leave it until the next watering. I also have potted bamboo outdoors that get lots of rain, particularly in the Seattle winter, with no adverse effects. Indoor bamboo need more attention than outdoor bamboo, but you mainly have to do the following: keep them well-watered, give them some standard fertilizer once or twice a year, mist them if the humidity gets really low, and re-pot when the pot is starting to get overcrowded. Which reminds me of one more thing: do not plant a bamboo in anything but a standard vase-shaped pot where the top of the rim is the widest dimension. If you use one of those really pretty ceramic pots where the top curves in, I guarantee that the only way you will be able to re-pot when it comes time is to destroy the pot with a sledge hammer. The rhizomes are tough, woody and go to the edges of the widest part of the pot. If you try to extract the plant, the rootball will not come out. For that reason, If I want to use a decorative pot for a bamboo, I plant it inside the biggest plastic nursery utility pot I can find that will fit inside the decorative pot. When it's time to re-pot, the whole thing gets lifted out of the decorative pot, the utility pot is removed, and then I either divide the plant or put it in a larger utility pot and get a larger decorative pot.

Well fortunately the pot is exactly as you mentioned so hopefully will be OK... Thanks for the help... Now looking forward to getting started