so dealing with files originating from other OS needs the ability to change the value of \n

I would say "to change the value of $/". -0 certainly doesn't change \n.

There are also some funky details about how -0 works. First of all, -0[octal] is limited to 3 following octal digits. Anything beyond that is interpreted as a new bundled switch (e.g. -07770 is equivalent to -0777 -0 (which is equivalent to just -0)).

-0 with no following octal digits will set $/ to "\0", the null character. As you say, -00 does paragraph mode ($/ = "") instead. This applies to -000 and -0000 also; as above, -00000 etc is interpreted as two separate switches where the first is meaningless, creating the pleasant cycle:

switch	effect
-0	\0 record separator
-00	paragraph mode
-000	paragraph mode
-0000	paragraph mode
-00000	\0 record separator
-000000	paragraph mode
-0000000	paragraph mode
-00000000	paragraph mode
-000000000	\0 record separator
-0000000000	paragraph mode

Not just -0777, but any attempt to specify an octal character greater than 0377 (255 decimal), will trigger slurp mode.

And starting with 5.8.1, -0 will allow hex characters to be specified like -0x1ff (but you can't bundle it with other switches like -0x1ffw; for backward compatibility, that is interpreted as -0 -x1ffw instead of -0x1ff -w (see perlrun for details on the -x switch)). Any number of hexidecimal digits are permitted, but only the low 32-bits are used. This allows specifying any unicode character as the record separator. Paragraph mode or slurp mode cannot be specified with -0x; -0x0 sets $/ to "\0", not "", -0x1ff (the "equivalent" of -0777) sets $/ to "\x{1ff}", not undef.

-0x actually allows an extra "x" or "0x" after the first one (e.g. -0x0x0d or -0xx0); this can be construed as a bug.