But it has lots of assumptions/prerequisites about taking the mean baked-in. It happens to work for this particular case, but in general you don't get far with such hand-wavy reasoning since you just get confused with which assumptions hold and which don't.
The original explanation was the actual SIMD approach, which is really cool. You can extend it right away to other problems.
Let's do the average of 85 and 95.
The leftmost digit of both is equal, so we leave it: X5
The "xor"/2 is the sum of the non equal digits divided by 2 (respecting their powers): (8+9)10 = (17)10 = 85
Now, we add them: 5 + 85 = 90 (which is the average of 85 and 95).
Let's take now 87 and 89:
The rightmost digits are equal: 8X
We do the 'xor'/2 for the left most: (7+9)/2 = 8
8X + 8 = 88
Let me know if there are some examples for which it would fail (I only spent a minute to test if the explanation extends to other bases).
The original explanation was the actual SIMD approach, which is really cool. You can extend it right away to other problems.