It interpolates once and remembers that value.

for my $word (qw( abc def )) {
   print  $word =~ /\Q$word/   ?1:0,"\n";  # 1 1
}

for my $word (qw( abc def )) {
   print  $word =~ /\Q$word/o  ?1:0,"\n";  # 1 0
}
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It's was used to prevent a regex pattern from being compiled repeatedly, but Perl does that even without "o" now. And between the check to skip unecessary compiles and qr//, the "o" modifier is no longer needed.