In most of the places where strings are used, we conceptualize the string as containing text characters--the same kind of characters found in buffers or files. Occasionally Lisp programs use strings which conceptually contain keyboard characters; for example, they may be key sequences or keyboard macro definitions. There are special rules for how to put keyboard characters into a string, because they are not limited to the range of 0 to 255 as text characters are.
A keyboard character typed using the META key is called a
meta character. The numeric code for such an event includes the
2**23 bit; it does not even come close to fitting in a string. However,
earlier Emacs versions used a different representation for these
characters, which gave them codes in the range of 128 to 255. That did
fit in a string, and many Lisp programs contain string constants that
use `\M-' to express meta characters, especially as the argument to
define-key and similar functions.
We provide backward compatibility to run those programs with special rules for how to put a keyboard character event in a string. Here are the rules:
Functions such as read-key-sequence that can construct strings
containing events follow these rules.
When you use the read syntax `\M-' in a string, it produces a code in the range of 128 to 255--the same code that you get if you modify the corresponding keyboard event to put it in the string. Thus, meta events in strings work consistently regardless of how they get into the strings.
New programs can avoid dealing with these rules by using vectors instead of strings for key sequences when there is any possibility that these issues might arise.
The reason we changed the representation of meta characters as keyboard events is to make room for basic character codes beyond 127, and support meta variants of such larger character codes.