Using advanced continuation techniques for dynamical systems, we elucidate the bifurcations leading to asymptotically stable square-wave pulsing and polarization mode switching in semiconductor lasers with mutual time-delayed and polarization rotating coupling. We find that the increase of coupling strength leads to a cascade of Hopf bifurcations on a mixed-mode steady state up to a transcritical bifurcation on a so-called pure-mode steady state where both lasers emit with the injected polarization state. From these successive Hopf bifurcations emerge time-periodic solutions that have a period close to the laser relaxation oscillation for weak coupling but a period close to twice the time delay for large coupling strength. The wave form of the time-periodic solutions also evolves from harmonic pulsing up to square-wave pulsing as has been observed recently in experiments.