Architecture: Semantic meaning of the definition of SAVE_ON_FLASH

One big string,

Is each statement recursive-descent-parsed each time it is executed?

Yes - there's no bytecode at all. It's slightly quirky, but it works and saves a lot of memory.

Could it save even more memory when building only references in RAM to the structural blocks - if.then.else, loops,... of the ('static'/uploaded) code (located in eprom)?