How does the use of $foo as a switch jive with the recomendation to use strict; for all programs?

In short, it doesn't - The -s argument is meant for quick-and-nasty argument handling, the usage of these variable names causing explicit package name errors when employed with strict.

For example:

rob@budapest:/home/rob# cat test.perl
#!/usr/bin/perl -s

use strict;

print "bar!\n" if ($foo);

rob@budapest:/home/rob# ./test.perl -foo
Variable "$foo" is not imported at ./test.perl line 5.
Global symbol "$foo" requires explicit package name at ./test.perl lin
+e 5.
Execution of ./test.perl aborted due to compilation errors.
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If however, strict is turned off within the scope where these variables are employed, everything is happy once more. Eg.

rob@budapest:/home/rob# cat test.perl
#!/usr/bin/perl -s

use strict;

{
    no strict;
    print "bar!\n" if ($foo);
}

rob@budapest:/home/rob# ./test.perl -foo
bar!
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perl -e 'print+unpack("N",pack("B32","00000000000000000000000111100000")),"\n"'