Collapse string gaps as \& (#25784)

In 9.10, "\65\ \0" would result in "A0", but in 9.12, it results in
"\650", due to the string refactoring I did in !13128. Previously, we
were resolving escape codes and collapsing string gaps as we come across
them, but after the refactor, string processing is broken out into
phases, which is both more readable and useful for multiline strings.