The second register state stay as the state you prepared it in, that is, it is left unchanged. Note that if $|u\rangle$ is a eigenstate of $U$ with eigenvalue $e^{2\pi i \theta}$ then when you apply $U^{2^j}$ to the state $|u\rangle$, you will get $U^{2^j} |u\rangle = e^{2\pi i \theta 2^j}|u\rangle $.

And no, the state in the first register is not entangled to the state in the second register as you can see the output state is written as $\sum_u c_u |\varphi_u\rangle |u\rangle = \sum_u c_u |\varphi_u\rangle \otimes |u\rangle $, that is they can be written as a tensor product (not entangled).
For a quick example, consider the first part of the circuit:

In particular, let's suppose $U$ is the Pauli-Z operator and $|u\rangle$ is just the state $|1\rangle$. More specifically, we are considering the circuit below:

Note that the second qubit is in the state $|1\rangle$ after application of the $X$ gate. The first qubit is in the state $\dfrac{|0\rangle + |1\rangle}{\sqrt{2}}$ after the application of the Hadamard gate. Then we applied the Controlled-Z gate. Note that $|1\rangle$ is an eigenstate of the Pauli-Z operator with $Z|1\rangle = -|1\rangle$. The state of the overall system is now:
$$ |\psi \rangle = \dfrac{|01\rangle - |11\rangle}{\sqrt{2}} $$
note the negative is resulted from the eigenvalue of $-1$ when we apply Pauli $Z$ to the state $|1\rangle$. It might be tempted to say that this state is entangled but it is not... because we can rewrite it as follow:
$$ |\psi \rangle = \overbrace{\bigg( \dfrac{|0\rangle - |1\rangle}{\sqrt{2}} \bigg)}^{\textrm{first qubit}} \otimes \overbrace{ |1\rangle}^{\textrm{second qubit}} $$
So the state of the second qubit stays the same. No changes. The state of the first qubit pick up a relative phase factor coming from the eigenvalue of $-1$ when we apply $Z$ to $|1\rangle$.
You can now try to look at:

which is now the circuit:

Once you worked it out, you will see that you can write the state of the system as follow:
$$ |\psi \rangle = \overbrace{\bigg( \dfrac{|0\rangle + |1\rangle}{\sqrt{2}} \bigg)}^{\textrm{first qubit}} \otimes \overbrace{\bigg( \dfrac{|0\rangle - |1\rangle}{\sqrt{2}} \bigg)}^{\textrm{2nd qubit}} \otimes \overbrace{ |1\rangle}^{\textrm{3rd qubit}}$$
As you can see, the state of the qubit $q_2$ stays the same. And they are not entangled to one another at all.