So..... your keys are not stored in words, but a QR code? Or is this just to move seeds to another hardwallet?

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Just a different way to represent seeds, originally made by SeedSigner, a stateless device that requires you to enter your seed every time you turn it on. Not exactly a fun thing to do on a Raspberry Pi with three tiny buttons.

QR codes all store plain text, re: words.

Apart from the compact option.

How is that piece of code handling that?

Because obviously it's translated to a plain text when the HWW reads it.

By converting the binary data.

Compact is binary which will look like gibberish to newbs. Really expands the options for hiding M-of-N in plain sight.