The idea is you can register a custom file encoding, analogous to built-in file encodings like utf-8, and use it to transform the source file before python loads it. An example is pyxl, kind of like jsx, where you put `# coding: pyxl` at the top and then it will transform bare `<html>` in the python file into calls to a template builder:
https://github.com/gvanrossum/pyxl3Incidentally this turns out to be super hard to search for without asking an LLM, since "python coding" is so overloaded, and using the feature this way is intentionally undocumented because it's not really what it's for, and not something I think most python users really want to encourage. So, forbidden python knowledge!