I'm curious as to what determines the use of 127 and 128 in this script

The format of system's return value.

system returns either -1, or a (at least) 32-bit value composed of three fields.

bit F E D C B A 9 8 7 6 5 4 3 2 1 0
   +---------------+-+-------------+
   |xxxxxxxxxxxxxxx|c|sssssssssssss|
   +---------------+-+-------------+
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• s: Signal that caused the child to exit or 0 if the child existed normally.
• c: A core dump was produced if 1.
• x: Child's exit code (if s is zero).

what is meant by "$? >> 8"?

Perl operators are documented in perlop.