SQL function LOR

I came across this researching something else in the SQL reference and it puzzles me.

It's a new function for me...

The LOR function returns a string that is the logical OR of the argument strings.
This function takes the first argument string, does an OR operation with the next
string, and then continues to do OR operations for each successive argument using
the previous result. If a character-string argument is shorter than the previous
result, it is padded with blanks. If a binary-string argument is shorter than the
previous result, it is padded with hexadecimal zeros.

Example
Assume the host variable L1 is a CHARACTER(2) host variable with a value of
X'0101', host variable L2 is a CHARACTER(3) host variable with a value of
X'F0F000', and host variable L3 is a CHARACTER(4) host variable with a value
of X'0000000F'.
SELECT LOR(:L1,:L2,:L3)
FROM SYSIBM.SYSDUMMY1
Returns the value X'F1F1404F'.

My understanding of "the logical OR of the argument strings is that each byte from string L1 is compared to L2 and L3, and for each bit position, bits are compared. If any of the corresponding bits is 1, then the result bit will be 1.  So looking at the values of the arguments, I don't get how it can get those 404 half-bytes.

Does anybody want to un-confuse me here? I assume the example isn't wrong, though in all these years I think I did come across one, just once -IIRC.

Thanks,  -- Alan Cassidy