Earlier quoted context omitted.
It’s not a loophole, it just happens that encoding information as optical tokens is much more efficient than text.
Of course it isn't A text encoding uses 8bits per character on average, tokenization further compresses that An image font would be 25 bits if 5x5, and most fonts are 12 pixels high Of course it isn't efficient, this is a pricing inefficiency and a hack to exploit it (even the author describes it as an exploit)
The top line can be the OCR-able instruction on how to decode the rest of the image, and the rest of the image would be random-looking colourful palette. It might not even need to use 8 bits per character, since ANSI is 7 bits/character.