Since the text operation implies character context, the byte needs to be interpreted in some way.

Yes, as a Unicode code point.

A string literal is not the same as IO; my explanation only applies to my example, not yours.

Both readline and the string literal create the same string, so that only makes sense if you say that readline is the one that does the iso-8859-1 decoding. Is that what you're saying?

(I hope not, cause it's preposterous to say that copying bytes from disk to memory is a decoding operation. In binmode no less!)

But it was a byte at level of the UNIX pipe. Now it is a code point. What mechanism changed it from a byte to a codepoint, if not (implicit) decoding as ISO-8859-1?

None. There's no now and then; it's always a code point, and it was always stored in a byte.

The mapping from bytes code codepoints is what an encoding does

I don't call the following iso-8859-1 decoding:

UV codepoint = s[i];
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