For golf historians, notice that the use of y///c instead of length is known as Abigail's length horror but was actually first invented by Joseph N Hall in 1996.
And the use of a (one stroke) reference \ to trigger autovivification is known as Thelen's Device and was invented by Michael Thelen aka thelenm in 2002.
This history is discussed in The Lighter Side of Perl Culture (Part IV): Golf.
So, this takes advantage of the string xor operator's
ability to increase the shorter string to match the length of the longer string. Then it returns a string whose length is that of the longer of the 2 strings.
(Bitwise String Operators)