That's a good analysis of the code. I just have one correction.
You said that this changes | Y % into , and z ! x into Q. Actually, it changes | into , and z Y ! % x into Q. When a translation specifies more characters on the left than on the right, the last character on the right is used for all the extras. (With the /d modifier, the extras are deleted from the target string instead.)
perlop explains the tr/// operator in greater detail.
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