Answer 1

The operator | has different functions depending on the types to its left and to its right.

set|set returns the unsion of two sets
but
int|int returns the binary "or" of two numbers

now
1 = 1 in binary
2 = 10 in binary
and therefore 1|2 evaluates to 11 in binary = 3 in decimal system
and therefore {1|2} evaluates to {3}

now in {3}|{1}|{2} we have the | as union of sets and it evaluates to
{1,2,3}